Behind the Numbers: Calculating the Unemployment Rate

by admin on April 4, 2011 · 9 comments

A lot of people noticed when the unemployment rate fell to 8.8 percent in March, but not everyone knows how that rate is determined. For instance, many people think that you have to receive Unemployment Insurance benefits in order to be counted as unemployed, which is not the case. So, to clear up any confusion it’s useful to review how the Bureau of Labor Statistics determines the unemployment rate.

Every month, the government contacts 60,000 scientifically-selected households and asks a range of questions about the employment status during the previous week of everyone in the household age 16 and older. We call this (using all the creativity imparted by our economics degrees) the “Household Survey.” BLS uses the answers to this survey to determine the labor market status of the each member of the household, and by extension, of the whole country. The “labor force” consists of all workers who did have jobs — the “employed” — plus all those who did not have jobs, but were actively looking for work and available to take it if offered — the “unemployed.” The headline unemployment rate is the number of unemployed workers divided by size of the labor force.

The headline unemployment rate is the traditional measure of unemployment in the U.S., and is directly comparable to measurements collected in other developed countries. However, BLS publishes several other alternative measures of labor under-utilization to help understand the full employment situation (see table A-15 in the monthly news release for more). You can find more details on how BLS defines and measures unemployment on its website.

Editor’s Note: The author, Andrew Langan, is a policy adviser in the Office of the Chief Economist at the U.S. Department of Labor.

{ 9 comments… read them below or add one }

1 David April 5, 2011 at 2:25 pm

So, what is the size of the labor force in the USA? It would be helpful to see how it shrinks and grows based on when people (possibly) give up on looking for work, and then get reinvigorated to return to a job search.

2 Forest A. Eubank April 6, 2011 at 1:19 am

As I observe the numbers and the explanation that a variety of scientifically selected familes are questioned. Do they question the disabled as a portion of the selection. I know I have been unemployed for a decade. To answer your question I became disabled due to a automobile accident on April 11, 2000. At this point in time I attend school with a GPA of 2.89. I have not received consideration for employment since the accident. Many in society assume the phisically and mentaly disabled are simular. The assumption many individuals have is they are conjoined.

The observance of the Rehabilitation Act of 1973 is questionable. The sum of money a person is allowed to make is about two thirds of SSD. SSD is only 66% of what an individual earned prior to the disability. A person can not afford to eliminate SSD funds.

When the disabled individual investigates the apprentice programs or jobs avaliable they are forced to compete with the healthy and require a Batchlor’s Degree to qualify for consideration. If or when a person is injured on the job why are they reduced from being an asset to society and forced to be a debt to the tax payers.

3 Forest A. Eubank April 6, 2011 at 1:25 am

I wonder if the calculation includes the disabled on SSD and desire employment. The type of employment which allows them to return to the level they were prior to their injury.

4 Sandra April 12, 2011 at 10:39 am

I always thought the unemployment rates were calculated based on tax, unemployment insuranc or other official data, not a limited random selection. I compared results for other social data obtained in the same manner and know the precision of this method is often quite low.

5 david scott May 25, 2011 at 9:14 pm

This is truth that you said.Because there is so difference between real situation and statistics.

6 Oliver June 26, 2011 at 7:10 am

I was sure the unemployment rates were calculated based on tax, unemployment insuranc or other official data, not just a limited random selection. I compared results for other social data obtained in the same manner and know the precision of this method is often quite low. Correct me if I’m wrong.

7 Juan Sheng December 8, 2011 at 2:14 am

I applied a lot jobs. Almost, it was no result. I am tiring for apply job. I don’t know next step what can I do. No money equal no life in America. Who control the job’s replcment?

8 Amanda May 9, 2012 at 8:43 am

To be of the most value to legislators, taxpayers and state program administrators, the method used to compute the Unemployment Rate should be based on Unemployment Insurance benefits being paid out nationally from all state (permanent) and federal (temporary) programs. Otherwise, there is no value in this information and the resources used to compute it are a waste and abuse of government resources.

9 Rick Borges January 15, 2014 at 12:01 am

I left the navy after retiring, went to school for welding and got a degree in welding technology. After applying and testing for the Job I was the only participant to actually pass the weld cert with little actual welding experience – the other 200 non working people with lots of experience couldn’t pass the certification. Every one of the 8 people they chose sat in training to pass cert with me and bragging about running out 16 or 24 months of the unemployment wave, and the only reason they were all there is because they HAD TO GET A JOB – the job was there months before but they were not out of unemployment money. Disgusting progressives who keep feeding the scum bags, who learn run out the unemployment at all costs while claiming they are LOOKING FOR EMPLOYMENT by submitting 3 sites where they looked for employment. Might as well just pay them all disability or ABILTY to work the system.

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