Frequently Asked Questions

Why does the Government collect statistics on the unemployed?

To know about the extent and nature of unemployment. How many people are unemployed? How did they become unemployed? How long have they been unemployed? Are their numbers growing or declining? Are they men or women? Are they young or old? Are they white or black or of Hispanic origin? Are they skilled or unskilled? Are they the sole support of their families, or do other family members have jobs? Are they more concentrated in one area of the country than another? After these statistics are obtained, they have to be interpreted properly so they can be used--together with other economic data--by policymakers in making decisions as to whether measures should be taken to influence the future course of the economy or to aid those affected by joblessness.

Where do the statistics come from?

Because unemployment insurance records, which many people think are the source of total unemployment data, relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940 when it began as a Work Projects Administration project. It has been expanded and modified several times since then. As explained later, the CPS estimates, beginning in 1994, reflect the results of a major redesign of the survey.

What are the basic concepts of employment and unemployment?

The basic concepts involved in identifying the employed and unemployed are quite simple:

  • People with jobs are employed.
  • People who are jobless, looking for jobs, and available for work are unemployed.
  • People who are neither employed nor unemployed are not in the labor force.

Who is counted as employed?

Not all of the wide range of job situations in the American economy fit neatly into a given category. For example, people are considered employed if they did any work at all for pay or profit during the survey week. This includes all part-time and temporary work, as well as regular full-time year-round employment. Persons also are counted as employed if they have a job at which they did not work during the survey week because they were:

  • On vacation;
  • Ill;
  • Experiencing child-care problems;
  • Taking care of some other family or personal obligation;
  • On maternity or paternity leave;
  • Involved in an industrial dispute; or
  • Prevented from working by bad weather.

Who is counted as unemployed?

Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.

Who is not in the labor force?

All members of the civilian noninstitutional population are eligible for inclusion in the labor force, and those 16 and over who have a job or are actively looking for one are so classified. All others--those who have no job and are not looking for one--are counted as "not in the labor force." Many who do not participate in the labor force are going to school or are retired. Family responsibilities keep others out of the labor force. Still others have a physical or mental disability which prevents them from participating in labor force activities.

What about cases of overlap?

When the population is classified according to who is employed, unemployed, and not in the labor force on the basis of their activities during a given calendar week, situations are often encountered where individuals have engaged in more than one activity. Since persons are counted only once, it must be decided which activity will determine their status. Therefore, a system of priorities is used:

  • Labor force activities take precedence over non-labor force activities.
  • Working or having a job takes precedence over looking for work.

Employed persons consist of:

  • All persons who did any work for pay or profit during the survey reference week.
  • All persons who did at least 15 hours of unpaid work in a family-operated enterprise.
  • All persons who were temporarily absent from their regular jobs because of illness, vacation, bad weather, industrial dispute, or various personal reasons.

Unemployed persons are:

  • All persons who were not classified as employed during the survey reference week, made specific active efforts to find a job during the prior 4 weeks, and were available for work.
  • All persons who were not working and were waiting to be called back to a job from which they had been temporarily laid off.

Persons not in the labor force are those who not classified as employed or unemployed during the survey reference week.

How large is the labor force?

The labor force, then, is not a fixed number of people. It increases with the long-term growth of the population, it responds to economic forces and social trends, and its size changes with the seasons. On average in 2000, there were roughly 135 million employed and 6 million unemployed making up a labor force of 141 million persons. There were about 69 million persons not in the labor force.

How are seasonal fluctuations taken into account?

As suggested in the previous section, the number of employed and unemployed persons fluctuates during the year in a pattern that tends to repeat itself year after year and which reflects holidays, vacations, harvest time, seasonal shifts in industry production schedules, and similar occurrences. Because of such patterns, it is often difficult to tell whether developments between any 2 months reflect changing economic conditions or merely normal seasonal fluctuations. To deal with such problems, a statistical technique called seasonal adjustment is used.

What do the unemployment insurance figures measure?

Statistics on insured unemployment in the United States are collected as a byproduct of unemployment insurance (UI) programs. Workers who lose their jobs and are covered by these programs typically file claims which serve as notice that they are beginning a period of unemployment. Claimants who qualify for benefits are counted in the insured unemployment figures.

How is unemployment measured for States and local areas?

See the Local Area Unemployment Statistics Frequently Asked Questions page.

Is there a measure of underemployment?

Because of the difficulty of developing an objective set of criteria which could be readily used in a monthly household survey, no official government statistics are available on the total number of persons who might be viewed as underemployed. Even if many or most could be identified, it would still be difficult to quantify the loss to the economy of such underemployment.

Have there been any changes in the definition of unemployment?

The concepts and definitions underlying the labor force data have been modified, but not substantially altered, even though they have been under almost continuous review by interagency governmental groups, congressional committees, and private groups since the inception of the Current Population Survey.

In January 1994, a major redesign of the Current Population Survey was introduced which included a complete revamping of the questionnaire, the use of computer-assisted interviewing for the entire survey, and revisions to some of the labor force concepts.

How are the unemployed counted in other countries?

The sample survey system of counting the unemployed in the United States is also used by many foreign countries, including Canada, Mexico, Australia, Japan, and all of the countries in the European Economic Community. More recently, a number of Eastern European nations have instituted labor force surveys as well. However, some countries collect their official statistics on the unemployed from employment office registrations or unemployment insurance records. Many nations, including the United States, use both labor force survey data and administrative statistics to analyze unemployment.

The Division of Foreign Labor Force Statistics of the Bureau of Labor Statistics adjusts foreign unemployment rates to U.S. concepts. Annual averages of comparative civilian labor force statistics from 1960 onward as well as monthly estimates of unemployment rates approximating U.S. concepts for selected countries and selected European Union countries are available.


Last Modified Date: May 14, 2007