Unemployment Rate: Measuring the Workforce

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Learn about how the unemployment rate is measured, broader measures of unemployment, and three types of unemployment: structural, cyclical, and frictional.

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Unemployment Rate: Measuring the Workforce

  1. 1. DataPost Unemployment Rate Measuring the Workforce Federal Reserve Bank of San Francisco Education & Outreach Date last updated: September 18, 2017
  2. 2. Unemployment Rate – Did You Know? DataPost 7.1 5.6 4.0 9.6 3 6 9 12 1980 1990 2000 2010 The Census Bureau conducts the CPS, and the Bureau of Labor Statistics (BLS) uses the results to report the official Unemployment Rate The official U.S. unemployment rate is measured using data from the Current Population Survey (CPS) Sources: Bureau of Labor Statistics & FRBSF Calculations U.S. Unemployment Rate (% values, averages for years shown) The official U.S. unemployment rate averaged 9.6% in 2010 compared to an average of 4.0% in 2000. www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach
  3. 3. Measuring Unemployment 94.8 153.4 7.1 Totals in millions, values seasonally adjusted Unemployed Employed Not in labor force As of August 2017, unemployment was 4.4% of the labor force To be counted in CPS employment data, surveyed persons must be age 16 or older “Unemployed” includes surveyed persons who are jobless and actively seeking a job Surveyed persons who are neither “employed” nor “unemployed” are considered “not in the labor force” DataPost Source: Bureau of Labor Statistics Note: Components may not add to totals due to rounding. www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach
  4. 4. Types of Unemployment DataPost Structural • Mismatch between the skills of unemployed workers and the skills needed for available jobs Frictional • The time between jobs when a worker is searching for a new job or transitioning from one job to another Cyclical • Directly related to business cycle swings, like expansions or recessions Who Is NOT Counted as unemployed? The Underemployed Those with part-time or seasonal jobs who would rather have full-time jobs. Discouraged Workers Those who have officially given up looking for work and are discouraged. www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach
  5. 5. 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 DataPost Source: Bureau of Labor Statistics Note: Gray bars indicate NBER recession dates Unemployment Rate Seasonally adjusted (%), Jan. 1980-Aug. 2017 www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach
  6. 6. 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 Oct. 2009 10.0% Nov. 1982 10.8% Jun. 2003 6.3% The Great Recession DataPost Source: Bureau of Labor Statistics Note: Gray bars indicate NBER recession dates Annotated Chart Notes Unemployment Rate Seasonally adjusted (%), Jan. 1980-Aug. 2017 www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach
  7. 7. What Do You Think? 1. In which years was the unemployment rate around 10%? 2. Are discouraged workers counted as unemployed? Why or why not? 3. What seems true about the relationship between unemployment and economic recessions? 4. Why would a survey be needed to calculate the rate of unemployment? DataPost www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach

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