How are unemployment figures produced every month?
All of our statistics on the monthly unemployment rate and the number of jobs created come from surveys produced by the U.S. Bureau of Labor and Statistics.
There are two surveys. One is a household survey, done nationwide with a sample in every state and asks, are you working? And if not, are you looking for work? It also inquires about demographic information. They compile the numbers and send them out to the states.
The thing to keep in mind is that the household survey is a very small sample size and has an error rate of plus or minus seven-tenths of one percentage point. If the jobless rate is 9 percent, it could be 9.7 percent; or it could be 8.3 percent.
We always caution people against putting too much stock in any one month’s number because there is a lot of play and a lot of revision. The preliminary number almost always is revised. It shows us a picture over time, because it’s not an absolute number.
What are some common misconceptions about data?
One thing people tend to assume is that the jobless rate reflects only those receiving jobless benefits. That is not the case. It’s the percentage of people who are unemployed and actively seeking work.
Something else we see is that people want to know more about discouraged workers or those workers who have given up looking for work. They aren’t factored into the official unemployment rate, but we do collect that information. The jobless rate for discouraged workers is usually five or six percentage points higher.
If you have discouraged worker data and other categories of unemployment data, why not include it in the state’s monthly releases on unemployment?
It’s a lot of excessive detail that can become complicated when people are looking for a simple snapshot in time about the economy.
