Unemployment (U.S.)

Financial Times  38 min ago  Comment 
It was the first good news about the economy for the French president since a hoped-for return to growth this year failed to materialise
newratings.com  6 hrs ago  Comment 
OSLO (dpa-AFX) - Norway's unemployment rate remained unchanged at 3.4 percent in July compared to April, the Statistics Norway said Wednesday. The expected rate was 3.3 percent. The rate for July indicates the average of June to August...
MarketWatch  Sep 24  Comment 
China’s leaders say the nation’s labor market is healthy, while independent economists aren’t so sure. But one subject of wide agreement is that the tradition of “hand me down” jobs needs to change.
SeekingAlpha  Sep 23  Comment 
By Tim Duy: Dallas Federal Reserve President Richard Fisher said Friday the US economy was threatened by higher wages. Via Reuters: Fisher said on Friday he worries that further declines in unemployment nationally could lead to broader wage...
newratings.com  Sep 23  Comment 
HELSINKI (dpa-AFX) - The unemployment rate in Finland rose less than expected in August, figures from Statistics Finland showed Tuesday. The jobless rate increased to 7.4 percent in August from 7 percent in July. Economists had expected the...
Reuters  Sep 23  Comment 
The Nifty posted its biggest single-day fall in about two-and-a-half months as blue-chips tracked weaker global shares on disappointment over European manufacturing data and concerns about an unemployment measure in a survey in China.
SeekingAlpha  Sep 22  Comment 
By David I. Templeton, CFA: It has been almost a year since taking a look at the Beveridge Curve. In the earlier posts we noted the curve compares the unemployment rate with the job vacancy rate. The job vacancy measure we have used in prior posts...
USAToday.com  Sep 22  Comment 
More 20% of Americans laid off the past five years are still jobless, a new report finds.
Bloomberg  Sep 21  Comment 
Former U.S. Treasury Secretary Lawrence Summers called for a “major” plan to boost the country’s economic growth and said borrowing to fix aging infrastructure would help lower the jobless rate.
The Hindu Business Line  Sep 21  Comment 
OECD says unemployment will fall in US, UK




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This article is about unemployment in the U.S. To read more about unemployment in other countries, see Unemployment (disambiguation).

Unemployment and employment are closely watched economic indicators. A low rate of unemployment often raises inflation fears, due to potential labor shortages. High unemployment raises fears of recession. Strong job growth means prosperity. Job losses, recession. The chart to the right shows the annual unemployment rate from 1948 through 2007.

In looking at unemployment and employment there is ample room for confusion. Two separate and distinct measures of unemployment are often reported in the media, as well as two separate and distinct measures of employment. Each indicator has value, but must be understood correctly. All four are reported by the Bureau of Labor Statistics (BLS).

Unemployment

  • The “Unemployment Insurance Weekly Claims Report” is often cited in the press, with a focus on “initial claims” for benefits. An increase or decrease is popularly taken as a portent of the direction of the economy. A seasonally adjusted insured unemployment rate is also reported weekly. This measure of unemployment is not equivalent to the unemployment rate that is reported on a monthly basis by the BLS for several reasons: (1) Not all persons are covered by Federal or State unemployment insurance programs. (2) Some who are covered don’t file claims. (3) Some are still unemployed when their benefits run out and they drop out of the program.
  • A broader unemployment rate is estimated on a monthly basis by the BLS. The data that form the basis for the unemployment rate are gathered through a monthly survey of 60,000 households. This is called the Current Population Survey (CPS). The reference period is the week that includes the 12th day of the month. This is the unemployment rate that is used when economists and market analysis look at trends over time. Note that both measures of unemployment are revised annually, resulting in changes in previously reported unemployment rates.

Definitions and Discussion

The unemployed are defined by the BLS as “persons aged 16 years and older who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment sometime during the 4-week period ending with the reference week.”

The unemployment rate is the number of unemployed as a percent of the labor force. The labor force consists of employed and unemployed persons. It is sometimes called the “civilian labor force” because it excludes people in the armed forces.

The size of the labor force varies over time due to economic conditions and changes in the number of working age people. When the economy is strong more people are apt to look for work and the size of the labor force swells. This could drive up the unemployment rate even when employment is growing. On the other hand, when jobs are scarce some people give up looking for work, which can result in a decline in the unemployment rate even as the economy weakens.

As the Baby Boom generation retires the size of the labor force might shrink, although a strong flow of young people into the labor force (the “Echo Boom” generation) and immigrants have the potential to keep the size of the labor force high enough. Many Baby Boomers may also delay the age at which they retire.

Illegal immigration is a complicating factor in the estimation of the number of employed and unemployed in this country. This “shadow labor force” is not well accounted for.

Employment

  • In the CPS (the survey of 60,000 households) each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations. The employed include paid employees and those who work in their own business
  • The BLS also conducts the Current Employment Statistics (CES) survey of 390,000 business establishments. It yields a detailed breakdown of employment, hours and earnings for all major industrial sectors (except agriculture) and subgroups each month. When analysts talk about change in manufacturing jobs, for example, they are referring to the CES survey. The CES says nothing about unemployment.

The two surveys show different levels of employment and employment growth and have on occasion been contradictory due to the different samples and survey methodologies.

Unemployment Rate Since 1948
Unemployment Rate Since 1948
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