Unemployment rate: How many Americans are really unemployed?
It depends on which measurement you use. For most people, the ability to find a job is the most basic sign of a healthy economy. Changes in the unemployment rate signal whether getting a job is becoming harder or easier for US workers. But other numbers, also sent out by the Labor Department on the first Friday of each month, offer additional barometers to watch. Here are five ways to measure the jobless problem, with the latest numbers plugged in.
1. Official unemployment rate: down slightly in April to 7.5 percent
This number comes from the US Department of Labor, which adds up all the people who don't have jobs, and are looking for work, and then divides that by the total labor force. The civilian labor force, more than 150 million strong, includes people age 16 or older who are either working or unemployed.
Many economists say the official jobless rate understates the real level of economic anxiety and dislocation in the labor force. It doesn't count, for example, people so discouraged they have stopped looking for work. But the fluctuations in this number are still a useful gauge – and widely watched.
Unemployment surged in the wake of the US financial crisis in 2008, and didn't hit its recession peak until October 2009 (at 10.0 percent). The jobless rate stood at 9.8 percent as recently as November 2010.
An important footnote for the statistically curious: When the Labor Department gives its monthly report, it's really giving data from two different surveys – one of ordinary people and one of employers. News reporters latch onto one key number from payroll employers (that's the total of how many jobs they have added or eliminated in the month) and one key number from households (the unemployment rate).
But the household survey offers its own window on the number of job gains in the economy, separate from the payroll tally.
The two surveys generally show the same trend for employment, but they can sometimes diverge in a given month. The unemployment rate can rise when payroll jobs are growing, for example, if the household survey finds fewer people saying they have a job.