Unemployment (U.S.)

Clusterstock  5 hrs ago  Comment 
From the BLS: Regional and State Employment and Unemployment Summary Regional and state unemployment rates were generally little changed in June. Twenty-two states and the District of Columbia had unemployment rate decreases from May, 14...
SeekingAlpha  Jul 19  Comment 
By Evariste Lefeuvre: Less famous than the Phillips curve, which relates unemployment and inflation, the Beveridge curve crosses vacant jobs with the unemployment rate. Its lesser success is due to the nature of the conclusions that can be drawn...
BBC News  Jul 18  Comment 
IMF head Christine Lagarde warns that financial markets maybe a little too upbeat given high levels of unemployment and debt in European economies.
Clusterstock  Jul 18  Comment 
Unemployment and changes in unemployment continue to vary across the country. The Bureau of Labor Statistics just released the June 2014 unemployment rates for each state. In every state except Alabama, unemployment rates have dropped since June...
Clusterstock  Jul 18  Comment 
Unemployment fuels unrest and anger. Political instability tends to escalate in regions with lots of economic volatility and limited employment opportunities, particularly for young people. In a new presentation to clients, Deutsche Bank's Raj...
SeekingAlpha  Jul 18  Comment 
By Jeffrey Rosen: Do not expect economic growth to return to anything like we have experienced in the past. The unemployment rate will remain elevated and hold well above what the CBO views as full employment. Economic growth is expected to stay...
Benzinga  Jul 17  Comment 
The Federal Reserve on Tuesday dropped a document in the laps of market participants and observers. Inside is 62 pages collectively known as the Monetary Policy Report. Picking through and grabbing the charts shows some context to what this...
Market Intelligence Center  Jul 17  Comment 
After the Open... Unemployment data came in lower again this week, but the good news was offset by poor housing starts data. After a record high close on Wednesday, the Dow is just slightly in positive territory today, while S&P 500 and Nasdaq are...
247WallSt  Jul 17  Comment 
The U.S. Labor Department is out with its tally on weekly jobless claims, and the verdict is that it was great news. While other information is out that was not positive, the weekly jobless claims report was close enough to being in-line that...
Wall Street Journal  Jul 17  Comment 
New applications for unemployment benefits fell last week, a fresh sign of an improving labor market.




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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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