Questions About Jobs Data

We’ve received several email questions about the employment data in the previous post.

Readers asked:

What would the unemployment rate have been if the government had not hired 415,000 Census workers in May.

It would have been 10.0% instead of 9.7%

What if federal government employment had not increased at all since December?  What would the unemployment rate be then?

It would have been 10.1% instead of 9.7%

Who counts as unemployed?  What is meant by “discouraged workers” and “the real unemployment rate?”

Unemployed is defined as actively seeking a job.  It’s often reported that only those who are eligible for and collecting unemployment benefits count as officially unemployed.  This is not correct.  Anyone who is actively seeking a job is counted as unemployed.

Discouraged workers are people who want a job but don’t count as “unemployed” because they are not actively looking for work.  They believe there are no jobs to be had so there is no reason to go out and look.

In May there were 5.7 million such discouraged workers.  If they and all the temporary census workers were added to the ranks of “unemployed” the rate would  would have been 13.3%.  Some commentators call this calculation the “real” unemployment rate.

It’s important to remember that these numbers are statistical samples.  Labor Dept. employees pick a random sample of homes, knock on doors, and ask how many people in the household are employed, unemployed, discouraged, etc.  This is called the Household Survey.

The number of jobs added or lost as reported by the media each month comes from a completely different process called the Establishment Survey.  Each month the Labor Department asks a sample of employers how many people are on their payrolls.