When unemployment rates go up, people lose jobs and their families lose income. This causes them to lose buying power, which can lead to a cycle of loss that hurts the economy as a whole. Unemployment statistics, therefore, are a vital part of the economic health of a country.
Early each month, the Bureau of Labor Statistics releases data on employed and unemployed people in the United States and many other characteristics about them. These statistics, particularly the unemployment rate, are closely watched and widely reported in the media.
To calculate the unemployment rate, the government conducts a monthly survey of people ages 16 and over. This survey is carefully designed to be representative of the population as a whole. The country is divided into 3,137 areas, and then each of these is further divided into clusters of four households. Each month, the survey asks a randomly selected sample of households to answer questions about their employment status. The survey is conducted by phone, and there is a great deal of care taken to ensure that the samples are representative.
The definition of “unemployed” varies by country, but in the US it is defined as those without jobs who are actively looking for work and available to work. Actively looking for work includes measures such as contacting prospective employers, visiting job agencies, and responding to advertisements. Not included in the count of the unemployed are those who have left the labor force for reasons such as retirement, higher education, or disability, and those who work part time but would like to have more hours.
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