GOOD QUESTION: How is the unemployment rate calcuated?

By: Rebekah Carter | SCNOW
Published: January 07, 2011

The national unemployment rate dropped to 9.4% Friday. Unemployment numbers get a lot of attention each month, especially the last three years, which leads some people to wonder how these rates are calculated.

Some have suspected that they are based off of the number of people who apply for, or receive, unemployment benefits each month.

But, that’s not the case. The Bureau of Labor Statistics feels this is not an accurate representation of the actual number of unemployed people in the country, since not all of them are receiving benefits.

So, the government sends out 60,000 surveys across the country each month to determine how many people are working and how many are not. There is a system in place to make sure that no household is interviewed within four consecutive months.

The survey determines the estimated number of “unemployed” people in the country. “Unemployed” is defined by the BLS as someone who meets the following criteria:

1: They are not working.

2: They have looked for a job within the past four weeks.

3: They are available to work.

The monthly unemployment rate is based off of the results from this survey. However, since there are people who are unemployed, but do not specifically fit the qualifications of being “unemployed,” there is another statistic that is released each month.

The “Labor Under-utilization Rate” is released when the unemployment numbers come out. This statistic includes those people who have gone longer than four weeks without actively searching for a job, are working part-time but not enough to fully support themselves, or who are not working for any variety of reasons.

For detailed information and a list of Frequently Asked Questions on the BLS’ system for determining the unemployment rate, visit its website.