Updated 5/04/2012

By Tim McMahon, editor

 Current Unemployment Rate

The current Seasonally Adjusted Unemployment Rate for April 2012 (released in May) is 8.1% down slightly from 8.2% the previous month. This is a significant improvement from an adjusted 8.9% in March 2011 but in my recent article Is the Government Fudging Unemployment Numbers? we look at some independant numbers to see if we can get the true picture. In addition to independant survey from Gallup I always recommend looking at the unadjusted employment  (not un-employment) numbers which often tell a different story. Although actual employment is up 896,000 from last month it is still virtually identical to December 2011 rates and still slightly below November 2011 levels. See the Current Employment Data for more information.

Much of the recent decrease in the unemployment rate over the last few months is actually the result of people being unemployed so long that they are now considered “discouraged” and have stopped looking.  This moves them out of the typical U-3 unemployment rate even though they remain unemployed. See U-6 Unemployment Rate for more information on the broader U-6 unemployment calculation that includes these “discouraged” unemployed.

Also see the Misery index ( which includes Unemployment Rate+ Inflation Rate). The unemployment rate in January of 2009 when Obama was sworn in was 7.8%.  The average unemployment rate during the Bush presidency was 5.3% and during the Clinton presidency  it was 5.2%.

In addition to looking at the unemployment rate I prefer to look at the actual employment rate which shows a different picture, in that we can see how many people are actually employed and it is less easily manipulated since the number of people who have opted for retirement or just stopped looking for work is not a factor.  See the Current Employment Data.

How the Government Comes Up With The Unemployment Rate

According to the U.S. Bureau of Labor Statistics they don’t 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 (CPS). Instead of calling the main office of 50 state offices, 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.

For more information on how the BLS performs the survey see BLS: How the Government Measures Unemployment

Unemployment data is interesting but my question is always… yeah, but how many real people actually have jobs?

In addition to calling 60,000 households, the government also performs a Current Employment Statistics (CES) survey where they collect data from employers. The CES survey sample is larger and so the employment data is considered more reliable than the unemployment data.

For more information See:

Current Employment Data

Historical Employment Data Chart

The Misery index measures inflation plus unemployment and is a good measure of the discomfort of the country’s population.

Sometimes the best thing to do during times of economic decline is to go back to school and wait out the decline while improving your skills at the same time.  You might want to check out the degree options available at Averett University.

See The Difference a Degree Makes in Unemployment Levels for more information on how a degree might help.