It happens the first week of every month. The BLS (Bureau of Labor Statistics) releases the unemployment figures for the month previous. If you’re out of work the numbers will either give you some glimmer of hope that you’ll be employed again sometime in your lifetime. Or give you an excuse to say “what’s the point” and retreat to the couch to watch “Knocked Up” for the 14th time.
So, as often as the jobless rate is quoted, you’d think we’d all know what it is and how it gets calculated. But when I ask people at my seminars how the rate gets computed I usually end up with about at 90% error rate. So, how is the number calcuated? Simply put, the unemployment or jobless rate is the percentage of Americans over the age of 16, who are not confined to an institution such as prison or the armed forces, who have been unsuccessfully trying to find work within the past 4 weeks.
Contrary to popular belief, the government doesn’t calculate the rate based on number of unemployment insurance (UI) benefit claims filed. Many people are still jobless when their benefits run out, and many more are not eligible at all or never bother to apply for benefits. So, to get the rate, the Bureau of Labor Statistics (BLS) conducts a survey of 60,000 households across the U.S. each month called the Current Population Survey (CPS). The size of the survey helps to insure it’s accuracy – a typical opinion poll only surveys about 2,000 people. The number of people who are out of work and looking is then divided by the total labor force, and voila – you get the unemployment rate.
But what does the rate actually mean? Look for Part 2 of this post for some insight into what the numbers mean and how it impacts your job search.