Unemployment Rate

Economic Indicator: The Unemployment Rate

“When workers are unemployed, they, their families, and the country as a whole lose. Workers and their families lose wages, and the country loses the goods or services that could have been produced.“   (U.S. Bureau of Labor Statistics, 2009)   The unemployment rate is a key statistic in the current economy, used to measure the employment situation in the nation, based on many carrying factors. As an economic indicator, the unemployment rate allows for analysis of current economic standings and predictions for future performance. Measured monthly, the unemployment rate is cited regularly, with media, government officials, and politicians at the top of the list of people discussing the nation’s current economic situation. (U.S. Bureau of Labor Statistics, 2009)

Unemployment Rate Constructs
Since 1940, the U.S. Bureau of Labor has conducted a sample survey known as the Current Population Survey (CPS) to reflect the current employment situation in the U.S.. This survey is given to 60,000 households, surveying approximately 110,000 individuals to exemplify the state of employment of the country. (U.S. Bureau of Labor Statistics, 2009)   Who receives the survey is organized by the sampling units that are determined geographically, with a total of 2,025 defined geographic areas. The Census Bureau then selects a sample consisting of 824 of these geographic areas to accurately represent the U.S. (U.S. Bureau of Labor Statistics, 2009) Highly trained Census Bureau employees then interview the sample households over a period of a year, asking direct questions about their employment situation along with other demographic questions that may be factored in, which is all recorded on a laptop and sent back to the Census Bureau’s database. (U.S. Bureau of Labor Statistics, 2009)

Measures of Unemployment Rate
Employment and unemployment classifications are specifically defined by the US Bureau of Labor. To be classified...