Thursday, December 1, 2022

What’s The Current Unemployment Rate

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Overall Rate Compared To Alternate Measures Of Unemployment

What Is the Real Unemployment Rate?

The official monthly report does also contain other measures of unemployment. The BLSs uses another metric known as the U-6 which not only considers the people out of work, but also those who are working part-time jobs when they want more, or have stopped looking for work though they would say yes if actually offered a job. That rate was 8.5% in September.

LISEP goes even further. Its true rate of unemployment not only considers those who are discouraged or under employed, but also includes anyone who is making less than $20,000 a year.

Gene Ludwig, chair of LISEP, says it is essential to consider wages when we examine true unemployment because of what wages say about the ability of the economy to provide a decent living for its people.

Numbers as high as were seeing ought to be deeply disturbing to any leader in the country, because it means were not, right now, a country thats able to do this, he said. Were not providing a decent life for our people.

He is also careful to note that $20,000 is a very conservative cutoff that is based on the lowest living wage in all of the states. In many states, even those making higher amounts would not be close to a living wage, suggesting that the TRU rate may be an undercount as well.

Labor Force Participation Rate

The LFPR can have a major impact on the actual level of unemployment.

Tom Thomas, one of our readers reminds us that if you want to compare U-3 numbers you have to do it in light of the Labor Force Participation Rate . He said, since U-3 only measures those who are actively looking for a job if the labor force declines the U-3 rate will appear better than it actually is. So, in order to compare two time periods, you have to adjust for the LFPR.

For more information see Labor Force Participation Rate.

Sample Composition And Rotation

The Labour Force Survey sample can be thought of as comprising eight sub-samples , with each sub-sample remaining in the survey for eight months, and one group “rotating out” each month and being replaced by a new group “rotating in”. As seven-eighths of the sample are common from one month to the next, changes in the estimates reflect real changes in the labour market, rather than changes in the sample. The replacement sample is generally selected from the same geographic areas as the outgoing one, as part of a representative sampling approach.

The sample comprises three components:

  • the matched common sample
  • the unmatched common sample
  • the incoming rotation group

The matched common sample describes the change observed for the same respondents in the current and previous month, while the other two components reflect differences between the aggregate labour force status of different groups of people.

While the rotation groups are designed to be representative of the population, the outgoing and incoming rotation groups will almost always have somewhat different characteristics, as they reflect different households and people. The design of the survey, including the weighting and estimation processes, ensures that these differences are generally relatively minor and do not affect the representativeness of the survey and its estimates. Monthly estimates are designed to be representative, regardless of the relative contribution of the three components of the sample.

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Seasonal Adjustment And Trend Estimates

In the April 2020 Labour Force release, the ABS advised that the method used to produce seasonally adjusted estimates would be changed from the concurrent method to the forward factors method, during the COVID-19 period. The forward factors approach is better suited to managing large movements at the end point of series and ensures that large movements do not have a disproportionate influence on the seasonal factors.

Given the large movements in the labour market during the COVID-19 period and the continuing use of a forward factors approach to seasonal adjustment, the ABS undertook an extensive annual review of its seasonally adjusted Labour Force series, prior to the release of April 2021 estimates.

Through this process static forward factors have been calculated for the next 12 months taking effect from the April 2021 release .

Employment And Unemployment Numbers:

Whats Texas Unemployment Rate
-1.751 1,888,000

Note: Due to COVID restrictions employment dropped rapidly in 2020 and although employment has rebounded some, if we compare current employment levels to those prior to COVID we still have a way to go just to return to those levels. Plus the Civilian Population has increased making the situation even worse.

So compared to prior to the COVID crash U-6 unemployment is still 1.5% worse, and U-3 is 1.5% worse and there are still 4.11 million fewer employed.

* Population control adjustments to the CPS adjusted down .

**Due to the BLS syncing its data with the census bureau which happens once a year and can be a huge change, so that doesnt really mean that all of the increase or decrease occurred during January.

Read more about how Employment and Unemployment numbers compare.

*Note: January 2017 is the first time since we have been tracking the Civilian Population that we have seen a decrease. January 2016 saw an increase of 461,000. The BLS says that they readjust their numbers every January to match the Census Bureau numbers.

**Note: January 2019, 2020 & 2021 all showed a decrease not on an annual basis but on a monthly basis, as the numbers reported last month are adjusted to correspond to the Census Bureau data.

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A03 Nsa: Employment Unemployment And Economic Inactivity For Men Aged From 16 To 64 And Women Aged From 16 To 59

Employment, unemployment and economic inactivity for men aged from 16 to 64 and women aged from 16 to 59 . The employment and inactivity rates shown in this table were the headline employment and inactivity rates until August 2010, when ONS replaced these headline rates with rates for those aged from 16 to 64 for both men and women. These new headline rates for those aged from 16 to 64 are shown in Table A02 NSA. These estimates are sourced from the Labour Force Survey, a survey of households.

How To Use The Unemployment Rate

Keep in mind that the unemployment rate is a lagging indicator. It tells you what has already happened, since employers only lay off workers after business slows down.

The unemployment rate isn’t lagging as much as usual because the pandemic is still creating sudden changes.

When a recession is over, companies resist hiring new workers until they are sure the economy will stay strong. The economy could improve for months, and the recession could be over before the unemployment rate drops. Although it’s not suitable for predicting trends, it’s useful for confirming them.

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Quarterly Rebenchmarking Of Labour Force Statistics

The ABS has revised the original Labour Force series from July 2019 to reflect the latest available preliminary and final estimates of the Estimated Resident Population. This quarterly process ensures that the Labour Force series promptly reflect any change in population trends and minimises the size of revisions that can occur when the series are rebenchmarked following each Census of Population and Housing.

In response to COVID-19 related changes in travel, the ABS has been revising preliminary Net Overseas Migration estimates more frequently. Net Overseas Migration estimates are a component of population estimates, from which Labour Force benchmarks are produced. These revisions have been incorporated into the quarterly rebenchmarking revisions. For more information, please refer to ‘Net Overseas Migration revisions in Labour Force benchmarks during COVID-19‘.

The usual resident civilian population in June 2021 was revised up by around 0.02% .

Revisions to original series also result in revisions to seasonally adjusted series.

History Of Unemployment In Canada

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Unemployment has risen on average since the mid-1960s, both in absolute numbers and as a percentage of the labour force . Annual average unemployment rates of 3 to 5 per cent were common before 1958 and from 1964 to 1969. From 1958 to 1963 and in the early 1970s, 5 to 7 per cent rates prevailed.

Over most of the post-1975 period, employment also grew, but the labour force grew even more rapidly so that the number and fraction that were unemployed rose. During the recession of the early 1980s , the unemployment rate jumped. In August 1981, employment declined, as did labour-force participation and the fraction of the working-age population that was employed . The unemployment rate rose steadily over the period to December 1982, reaching 13.1 per cent. This is thought to be the highest rate of unemployment since the Great Depression, when the unemployment rate peaked at 19.3 per cent. The unemployment rate was gradually reduced to about 7 per cent in the late 1980s, but rose sharply again during the recession of the early 1990s, peaking at 12.1 per cent in November 1992.

After the recession of the early 1990s , employment recovered slowly, and, as a result, a drop in the unemployment rate was delayed until 1994. Strong employment growth from 1997 to 2000 brought the unemployment rate down to 6.8 per cent in January 1999. Unemployment spiked again briefly in the early 2000s, before resuming its decline in September 2003.

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Unemployment And Racialized Canadians

Statistics Canada defines racialized Canadians as persons, other than Aboriginal peoples, who are non-Caucasian in race or non-white in colour.Though racialized Canadians participated in the labour force at a rate higher than non-racialized Canadians, 9.2 per cent of racialized Canadians were unemployed in 2016, compared to 7.3 per cent of non-racialized Canadians. Arab Canadians had an 85 per cent higher unemployment rate and Black Canadians a 71 per cent higher rate than non-racialized Canadians gaps in unemployment that were consistent with 2006 census results. In 2016, racialized women had the highest unemployment rate, at 9.6 per cent. While non-racialized women had a lower unemployment rate than non-racialized men, unemployment among racialized women was higher than among racialized men .

How The Us Government Comes Up With The Current Unemployment Rate

According to the U.S. Bureau of Labor Statistics, they dont actually track the unemployment numbers but instead, they base the all-important Unemployment Rate on a survey. You would think they would collect the numbers from the 50 states who would get them from their unemployment offices. But that is not how it is done. Unemployment rates are calculated based on a random survey called the Current Population Survey . No one can accuse the government of being efficient, rather than calling the main office of 50 state offices , instead, the government calls up 60,000 households every month and then estimates the unemployment rate based on that sample. According to the BLS,

Every month, one-fourth of the households in the sample are changed, so that no household is interviewed more than 4 consecutive months. This practice avoids placing too heavy a burden on the households selected for the sample. After a household is interviewed for 4 consecutive months, it leaves the sample for 8 months, and then is again interviewed for the same 4 calendar months a year later, before leaving the sample for good. This procedure results in approximately 75 percent of the sample remaining the same from month to month and 50 percent from year to year.

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Breakdown Of Participation Rate By Race And Gender

These charts give a glimpse into those whose labor participation was most affected by the pandemic. For Black and Hispanic people, the drops in labor participation were more dramatic than that of their white counterparts with notable gaps between their rates of participation during the pandemic and their pre-pandemic norms. Each drop not only represents those without a job, but more specifically, those who have had to drop out of the labor force entirely.

Structural barriers, such as the location of jobs, alignment of the skillsets of workers to available work, lack of childcare or even discriminatory practices, have influence on who participates in the labor force.

I call it the spigot effect, said Rodgers. For certain groups, you have to take into account how much the faucet is turned on.

When workers face enough barriers to drop out of the labor force entirely, they no longer appear in the headline unemployment rate at all.

Although 4.8% may sound like a job market in healthy recovery, the truth is that the pandemic is still being felt across the labor market and it is hurting those who can least afford it.

Seasonally Adjusted Unemployment Rate Chart 1948

U.S. Unemployment Rate Expected in 2020  ISABELNET

Current US Unemployment Rate Chart

Unemployment remains below all the previous peaks of 1949, 1954, 1958, 1961, 1971, 1975, 1982, 1992, 2003, and 2009. This means that unemployment is back below the extraordinarily bad and has entered normal territory i.e. it is no longer in the red zone and is now in the yellow zone in the chart above.

Prior to the COVID-19 spike, February 2020s 3.5% Seasonally Adjusted U-3 unemployment levels were extraordinarily good i.e. just a hair above the 1969 lows of 3.4%. The only break below 3.4% was all the way back in 1953 . The COVID worldwide spike took unemployment to unprecedented levels but unemployment is back within the normal range which is still not fantastic but is improving.

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Alternative Data Sources Shrinking

For years the Gallup survey people conducted their own survey to determine the unemployment rate and published an unadjusted version. Unfortunately, as of July 31, 2017, they discontinued surveying unemployment-related numbers including U-3, U-6 and Payroll to Population . This puts us back to relying strictly on government sources and unfortunately in the past, we found significant differences between what the government was telling us and what independently collected numbers told us.

For instance, according to Gallup the Unadjusted Unemployment for June 2017 was 5.1% while the BLS said it was 4.5%. Gallup said Underemployment was 13.4% while the BLS said it was 8.9%.

What Data Supports That The Economy Is Good Right Now

Inflation and the unemployment rate are two common indicators for evaluating the health of the economy. While inflation has increased, the unemployment rate fell to 4.6 percent at the end of October the lowest since April 2020, when the unemployment rate hit a historic 14.8 percent at the beginning of the pandemic.

The cost of unemployment to the individuals who are unemployed is a lot higher than the cost of inflation, said Michael Klein, an economics professor at Tufts University and executive editor of Econofact. An increase in the unemployment rate by two percentage points, I would say, is more damaging than an increase of inflation by two percentage points.

But the impact of being unemployed is only felt by those who are unemployed, while inflation can be felt by everybody, which can sometimes lead to a misunderstanding of the economy, Klein said.

The nations gross domestic product the total output of goods and services has continued to grow as well, increasing by 2 percent in the last quarter. This is a slower growth than previous quarters, but according to Stanford University a GDP increase of about 2 percent is a sign of a steady economy. Economists say this shows recovery from the 31.2 percent drop in GDP in the second quarter of 2020 the largest drop in U.S. history.

Some of the increases people are feeling right now could be considered catching up in prices as the economy recovers from the pandemic, economists told the PBS NewsHour.

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Compare The Real Unemployment Rate

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Throughout the years, the official rate has been a little more than half the real rate. That remains true no matter how well the economy is doing. Even in 2000, when the official rate dropped to 3.8%, the real rate nearly doubled it at 6.9%. In October 2009, the unemployment rate was 10.0%its highest after the 2008 recessionand the real rate was still a much higher 17.1%.

The BLS has published the unemployment rate every year since 1929.

To put things in perspective, the chart below compares the official unemployment rate to the real rate since 1994 . The rates given are for January of each year.

Year

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