Unemployment (U.S.)

New York Times  9 hrs ago  Comment 
Britain’s economy is thriving, and unemployment is at its lowest level since 1975. But new data exposes potential trouble spots.
Wall Street Journal  Apr 13  Comment 
The number of Americans applying for unemployment benefits decreased last week, a sign of continued health in the U.S. labor market.
guardian.co.uk  Apr 13  Comment 
Once known for bucket-and-spade holidays, Rhyl has since seen high unemployment. But a £33m regeneration of the Welsh town is underway It was summertime when Katey Howell, 34, first visited Rhyl, and she was bowled over by a town where everyone...
WA Business News  Apr 13  Comment 
The jobless rate in Western Australia notched up 0.4 percentage points last month, while the nation’s unemployment remained steady.
WA Business News  Apr 13  Comment 
The unemployment rate remained steady at 5.9 per cent in March, official figures show, in line with market expectations.
MarketWatch  Apr 12  Comment 
A rock-bottom unemployment rate has been an excellent indicator of upcoming recessions and a very good warning sign of corrections and bear markets ahead.
guardian.co.uk  Apr 12  Comment 
UK living standards seem to be declining, as they did in the coalition years – but in very different economic circumstances Looking back, the spring of 2015 was the perfect time for David Cameron to fight a general election. Tumbling oil prices...
guardian.co.uk  Apr 12  Comment 
Despite another fall in unemployment and a rise in vacancies, inflation outstripped pay growth in February Rising prices and stagnant wage growth have resulted in the first fall in living standards in two and a half years, according to official...
Forex News  Apr 12  Comment 
The Great Britain pound traded basically flat today after the release of employment data. The report was mixed, giving the currency no help in finding a direction to move. Average weekly earnings rose 2.3% in the three months...
Clusterstock  Apr 12  Comment 
LONDON — Unemployment in the UK fell once again in March, according to the latest data released by the Office for National Statistics on Wednesday. Headline unemployment fell was 4.7% in the month, in line with the forecasts of economists and...




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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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