PRINCETON, NJ -- Gallup's Net New Hiring Activity measure -- not seasonally adjusted -- was essentially unchanged in June, after a 2.2 percentage-point drop in May and a 1.1-point drop in April.
Sixth Month of Job Losses Expected in June
A Bloomberg survey of 79 economists published on Wednesday morning concluded that U.S. jobs declined by about 60,000 in June, while ADP reported that the private sector lost 79,000 jobs in June. Thursday morning, the Bureau of Labor Statistics will provide the government's report on job growth and the unemployment rate for June.
Gallup's Net New Hiring Activity measure, based on the views of more than 8,000 employees interviewed in June, was essentially unchanged compared to May. This follows a sharp drop of 2.2 points in May and reflects a drop of 5.7 points over the first six months of this year. This means that in June, employed Americans perceived no difference in the recent hiring and firing activities of their employers, suggesting no change in jobs or the unemployment rate. On the other hand, Gallup's data are not seasonally adjusted, so caution is warranted when comparing these results to the seasonally adjusted results that the government will report Thursday morning.
Gallup's Net New Hiring Activity measure was initiated in January 2008. It is an effort to assess U.S. job creation or elimination based on the self-reports of more than 8,000 individual employees each month about hiring and firing activity at their workplaces. In order to calculate this measure, Gallup asks current full-time employees whether their employers are hiring new people and expanding the size of their workforces, not changing the size of their workforces, or letting people go and reducing the size of their workforces. Net new hiring activity is computed by subtracting the "letting go and reducing" percentage from the "hiring and expanding" percentage. The assumption is that employees across the country have a good feel for what's happening in their companies, and that these insider perceptions can yield a useful summary indication of the nation's job situation.
Over the first six months of this year, the percentage of employees saying their companies are hiring has fallen from 39.8% in January to 37.0% in June. At the same time, the percentage of employees reporting that their firms are letting people go has increased from 13.7% in January to 16.6% in June. Over the first five months of this year, the BLS shows the United States has lost more than 300,000 jobs.
Net New Hiring Activity by Region
On a regional basis, the East has suffered from the recent financial crisis, with many financial services firms announcing layoffs. The 4.9-point decline in net new hiring activity between January and June in the East reflects the significant impact on employment that has taken place. While this effect may be less than some might anticipate, it should be recognized that the fallout from the credit crunch is still unfolding and may be more fully reflected in the months to come.
Net new hiring activity in the Midwest fell by 5.8 points from January to June, reflecting the continuing job stress in this region of the country. While the first-half decline is slightly larger than the nationwide average, it also reflects the long-suffering nature of the job situation in this part of the country, with the percentage of employees reporting that their companies were letting people go increasing from 15.0% to 17.1% -- the highest level in the four regions measured.
Net new hiring activity has fallen by 6.4 points over the first six months of 2008 in the South. This is the largest regional decline for the first six months of the year, with the percentage of employees saying their companies were hiring falling from 42.4% in January to 39.3% in June; still, this is the highest percentage of employers hiring in any region.
Net new hiring activity in the West fell by 4.9 points between January and June. The percentage of employees saying their companies were hiring fell from 37.8% in January to 36.5% in June, while the percentage reporting that their employers were letting people go increased from 13.4% in January to 17.0% in June.
Not a Good Year for Jobs
Gallup's Net New Hiring Activity measure confirms the Bureau of Labor Statistics' findings that the first six months of 2008 have not been good for the jobs market. While the most recent month's results suggest -- at least on an unadjusted basis -- that the jobs market stabilized in June, this result may be temporary at best. Many of the financial-sector job cuts that have been announced have yet to be reflected in the marketplace. Further, the last of the tax rebates are scheduled to go out next week, and that spending stimulus may have had at least some moderating impact on the most recent job losses.
At this point, it does not appear that the much hoped-for second-half economic recovery is on the horizon. And, while the jobs market results for the first half of 2008 were not good, a reasonable assessment of the lagging nature of overall economic activity on hiring and firing suggests that the jobs situation is likely to get worse before it gets better as the remainder of 2008 unfolds.
Gallup is interviewing no fewer than 1,000 U.S. adults nationwide each day during 2008. The economic questions analyzed in this report are asked of a random half-sample of respondents each day. The results reported here are based on combined data of more than 8,000 interviews each in January, February, March, April, May, and June. For results based on these samples, the maximum margin of sampling error is ±1 percentage point.
Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
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