Information Used for Unemployment Statistics

How The U.S. Government Determines and Reports The Unemployment Rate

Sep 6, 2009

Newspapers, the evening news, and the Internet are full of statistics and numbers related to unemployment, but who calculates all these numbers? And how do they do it?

Slate recently reported on how the U.S. government tallies the number of jobs lost in a month, however the total number of jobs lost in a month is only one number or statistic in a realm of many surrounding the economy and specifically unemployment.

While hearing statistics like "[t]he U.S. economy shed 298,000 jobs in August" from Brian Palmer in his September 3, 2009 Slate.com article "How Does the Government Count Lost Jobs?" can be overwhelming, if these large numbers can be considered in context and if the American population learns how these numbers are calculated, the statistics can be better appreciated and more easily understood.

What Is Statistics?

Statistics is a field of mathematics that uses large numbers and aggregates of data to analyze and calculate information. The larger the amount of data used, the more meaningful the statistical result is.

The more information and data collected, the more accurate the statistics will be. With more information and more data anomalies are able to be discarded and the means, modes, and averages (among other things) can be more easily calculated without being influenced by smaller sets of outlying data points.

One way the U.S. government collects unemployment data is through the use of surveys. The surveys are sent to business owners and human resource managers and request information including the number of employees currently on payroll, how much each employee makes, the total dollar amount of the payroll, the last date employees were paid, and if the business anticipates terminating any employees, going out of business, or decreasing salaries.

The surveys are printed on a type of scantron sheet with bubbles to be darkened and delineated spaces to neatly print numerical information so that the completed surveys may be read electronically once they are mailed back.

There are several government agencies that collect employment information from businesses:

What Unemployment Information Gets Reported?

The Bureau of Statistics releases a variety of statistics about the U.S. unemployment rate:

The local and state unemployment rates are typically estimates based on the surveys returned and other information available from related local and state government agencies and entities. Several months after the estimates are reported and released they are then corrected and adjusted using data from unemployment insurance claims and other sources.

How to Better Understand the Statistics

It is important to keep in mind that statistics rely on interpreting data and information and are only as accurate as the methods used to collect the information. It is also helpful to consider the different categories that are used to classify unemployment statistics.

By knowing where the information comes from, how it is collected, and how it is reported it is possible to gain a better understanding of unemployment information and statistics reported in the news.

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The copyright of the article Information Used for Unemployment Statistics in American Affairs is owned by Tracey Carter. Permission to republish Information Used for Unemployment Statistics in print or online must be granted by the author in writing.