Mish's Global Economic Trend Analysis

---

Gallup Poll Visualizes Effect of Obamacare Posted: 09 Dec 2012 08:47 PM PST Gallup's seasonally adjusted unemployment rate is 8.3% for November, up nearly one percentage-point over October's rate. Gallup's underemployment jumped from 15.9% to 17.2%. The Gallup survey, which polls approximately 30,000 people monthly, was radically different from the BLS report  that came out a day later. Please consider the Gallup economic report U.S. Unadjusted Unemployment Shoots Back Up. U.S. unemployment, as measured by Gallup without seasonal adjustment, was 7.8% for the month of November, up significantly from 7.0% for October. Gallup's seasonally adjusted unemployment rate is 8.3%, nearly a one-point increase over October's rate. Underemployment, as measured without seasonal adjustment, was 17.2% in November, a 1.3-point increase since the end of October. The uptick in November also puts an end to the six-month trend of improvements or no change. Still, underemployment has improved 0.9 points since November 2011. Gallup's U.S. underemployment measure combines the percentage who are unemployed with the percentage of those working part time but looking for full-time work. Gallup does not apply a seasonal adjustment to underemployment. The increase in underemployment is the result of an increase in the number of people unemployed as well as the number of people working part time but wanting full time work, which rose to 9.4% in November from 8.9% in October. The number of workers wanting full-time positions generally increases during the holiday season as more people take on part-time seasonal work. Compared with this time last year, the percentage of workers desiring additional work is down a modest three-tenths of a point. Obamacare Responsible? Gallup did not offer reasons for this shift but I suspect two. Large numbers of part-time workers were hired as a direct result of Obamacare in September and October. Additional seasonal workers were hired early. For more on Obamacare and the effect on jobs, please see October 9: Is Obamacare Responsible for the Surge in Part-Time Jobs? October 10: Prepping for Obamacare, Olive Garden and Red Lobster Cut Workers' Hours; Are Other Companies Doing the same? Tip Sharing Lowers Minimum Wage; Like One, Like All? October 20: Mish Obamacare Mailbag: Expect More Part-Time Jobs Note the sudden huge divergence between Gallup and the BLS. The Obamacare theory, even if correct, still fails to explain that divergence. In the BLS report, the labor force magically shrunk by 350,000 artificially lowering the unemployment rate. No such thing happened in the Gallup survey for the unemployment rate to blast .9 percentage points higher. Regardless of "why", if the latest Gallup survey is correct, expect to see jumps in the BLS unemployment rate in the coming months. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Gallup Reports Upper-Income Spending Worst November Ever Posted: 09 Dec 2012 09:53 AM PST With the generally upbeat spending reports on black Friday and cyber-Monday, Gallup paints a different point of view in its most recent poll that shows U.S. Consumer Spending Holds Steady, Consistent With 2011 Americans' self-reported daily spending averaged $73 in November, essentially on par with September and October. It is also similar to the $71 Americans spent last November and slightly higher compared with November 2010 and 2009 -- but still much lower than in November 2008. November 2012 vs. November Prior Years U.S. Upper-Income Spending Sees Worst November on Record Upper-income Americans' (defined as those making at least $90,000 per year) self-reported daily spending was lower this November -- an average of $113 -- than in any November dating back to 2008. Upper-income spending has been trending downward since September, although the decline has not been large enough to drag down the overall spending figures. Lower-income Americans' spending in November -- an average of $61 -- is on par with the $60 they spent last November. Lower-income spending is generally quite stable from month to month and has been holding steady since March. Bottom Line Although November marks the beginning of the holiday season -- generally a time for spending and splurging -- Americans did not spend any more than usual this November, and upper-income Americans appear to be spending less than usual. Americans' self-reported spending in November is on par with November 2011, matching Gallup's finding that Americans predict they will spend about as much on holiday gifts this year as they did last year. Note that both charts paint a different picture of holiday spending in the recovery. Spending levels did not recover to pre-recession levels, at least as reported in Gallup surveys.What consumers actually spend vs. what they report to Gallup might not be the same thing. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610