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Message
I am trying to understand how the unemployment rate is calculated now....
Posted on 12/3/16 at 8:52 am
Posted on 12/3/16 at 8:52 am
vs any other point in time. Is there a website that explains this?
8
Posted on 12/3/16 at 8:56 am to I Love Bama
its all fake numbers i posted a thread about this on the poli board yesterday asking if trump would actually use real numbers vs obama. The reality is, unemployment is not 4.7% they only count those participating, whatever the frick that means and apparently only 60% give or take even participate, 40% of americans do not they say. It would be in trumps best interest to blow this facade up bc at 4.7% he has nowhere but down to go and if we're really at 20-25% like I think, it would be best to report it that way and improve on it.
Posted on 12/3/16 at 9:44 am to I Love Bama
The DOL conducts monthly surveys, they have been doing this for a long, long time and it is probably time for a serious discussion on how to get more accurate data. I would think the IRS could give us much better data.
I am not a huge believer in how they gather data like this in general (see recent election results vs predictions, also TV numbers I think are a joke) but there are a lot of statisticians out there that would disagree.
I am not a huge believer in how they gather data like this in general (see recent election results vs predictions, also TV numbers I think are a joke) but there are a lot of statisticians out there that would disagree.
This post was edited on 12/3/16 at 9:45 am
Posted on 12/3/16 at 11:42 am to hiltacular
They calculate the unemployment rate by looking at total claims for weekly jobless benefits/Unemployment Insurance Claims. UI Benefits are only payable if the unemployed person/claimant attests to the State Workforce Agency (State Department of Labor or Louisiana Workforce Commission, for example) paying the claim that he is able, available and actively searching for work.
Some states simply require to click a box, press a button on your phone or check a box on paper to do this. Some go further and require you to document your work searches for randomized audits to ensure you aren't soaking it up but legitimately searching for work.
For many UI claimants, they may forget to claim, or like Texas only claim every two weeks, or are just flat out lying about searching for work, etc. Anytime that happens and you don't file, it's considered that you are no longer unemployed, since paying UI benefits requires the SWA to verify the claimant attests to be searching.
Total jobless claims filed would be a more accurate depiction of the labor participation rate. They're reported weekly and aggregates would provide better analysis IMO.
Some states simply require to click a box, press a button on your phone or check a box on paper to do this. Some go further and require you to document your work searches for randomized audits to ensure you aren't soaking it up but legitimately searching for work.
For many UI claimants, they may forget to claim, or like Texas only claim every two weeks, or are just flat out lying about searching for work, etc. Anytime that happens and you don't file, it's considered that you are no longer unemployed, since paying UI benefits requires the SWA to verify the claimant attests to be searching.
Total jobless claims filed would be a more accurate depiction of the labor participation rate. They're reported weekly and aggregates would provide better analysis IMO.
This post was edited on 12/3/16 at 11:46 am
Posted on 12/4/16 at 9:21 am to I Love Bama
Although nobody (including myself) responded to Bama's original question, I think it's useful to mention this link from BLS that describes in some detail what is currently being done to measure this:
LINK
Of note:
So apparently this basic method (a sample of individual surveys) has been used since 1940, with changes in the details since then. Based on the survey answers, each interviewee is classified as being employed, not employed, or not in the labor force at all. For example, if you were able to get on disability and aren't looking for work, you are not "unemployed", you just aren't in the available labor force at all.
Although one may or may not disagree with the method and how accurate it is, it isn't a "made up number" either.
LINK
Of note:
quote:
Some people think that to get these figures on unemployment, the government uses the number of people collecting unemployment insurance (UI) benefits under state or federal government programs. But some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI information cannot be used as a source for complete information on the number of unemployed.
quote:
Because unemployment insurance records relate only to people who have applied for such benefits, and since it is impractical to count every unemployed person each month, the government conducts a monthly survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940, when it began as a Work Projects Administration program. In 1942, the U.S. Census Bureau took over responsibility for the CPS. The survey has been expanded and modified several times since then. In 1994, for instance, the CPS underwent a major redesign in order to computerize the interview process as well as to obtain more comprehensive and relevant information.
So apparently this basic method (a sample of individual surveys) has been used since 1940, with changes in the details since then. Based on the survey answers, each interviewee is classified as being employed, not employed, or not in the labor force at all. For example, if you were able to get on disability and aren't looking for work, you are not "unemployed", you just aren't in the available labor force at all.
Although one may or may not disagree with the method and how accurate it is, it isn't a "made up number" either.
Posted on 12/4/16 at 9:56 am to foshizzle
A lot of assumptions to get to a number that is treated like a holy grail. Any idea the stabdard error given this is a survey?
It would not be politically beneficial to change the method but it clearly has its flaws.
It would not be politically beneficial to change the method but it clearly has its flaws.
Posted on 12/4/16 at 10:41 am to lynxcat
quote:
A lot of assumptions to get to a number that is treated like a holy grail.
Policy makers understand it is an estimate, that error is involved and even estimate the size of that error.
It's the general public that treats it as "holy grail", but of course the general public is more interested in feeling good or bad about things than in making the slightest effort to actually understand anything.
Posted on 12/4/16 at 4:37 pm to I Love Bama
When you ask about the unemployment rate, which one are you asking about? U-1 thru U-6 are calculated in different ways and represent different measures - always have, always will. The headline number is U-3. That's the number that most people think of as "the" unemployment rate, and although there have been some changes in the methodology over the years, I'm not aware that anything radical has happened over the past decade or so.
Here's a good link that explains all of the measures, including U-3:
BLS Unemployment Rates
Here's a good link that explains all of the measures, including U-3:
BLS Unemployment Rates
quote:
The “official” unemployment rate is the most well-known. BLS defines a worker as unemployed if they are jobless but actively seeking work. The official unemployment rate is the number of workers who are unemployed divided by the number of workers who are either employed or unemployed. At its peak in the aftermath of the Great Recession, the official unemployment rate reached 10 percent; as of August 2016, it is now down to 4.9.
Posted on 12/4/16 at 5:23 pm to I Love Bama
It is calculated to go lower before election time to favor Party in control
Posted on 12/4/16 at 11:43 pm to I Love Bama
Under George Bush, his DOL dropped those still looking for work after 6 months. They are not included in the numbers.
Posted on 12/5/16 at 7:33 am to I Love Bama
I guess what I am trying to see is what is the unemployment rate if we utilized the methods from 1980, 1990, 2000 to calculate.
Thanks for the links. I'll try to dig a little deeper into this.
Thanks for the links. I'll try to dig a little deeper into this.
Posted on 12/5/16 at 9:06 am to I Love Bama
quote:
I guess what I am trying to see is what is the unemployment rate if we utilized the methods from 1980, 1990, 2000 to calculate.
To the extent that there is any "funny business" occuring, it's in classifying people not working as "looking for work" or "not looking for work". If one is not looking for work, they are tossed out of the labor pool. The unemployment rate thus is the number of people in the pool looking for work, divided by the pool.
The calculation hasn't and doesn't change... the way of getting the numbers can and has.
Posted on 12/5/16 at 9:10 am to LSUFanHouston
Ok. Thanks.
I thought in school they had told us that the variables they consider in calculating the unemployment rate had changed multiple times over the years. However, my memory is shite and that was over 10 years ago.
I thought in school they had told us that the variables they consider in calculating the unemployment rate had changed multiple times over the years. However, my memory is shite and that was over 10 years ago.
Posted on 12/5/16 at 10:18 am to I Love Bama
quote:
I guess what I am trying to see is what is the unemployment rate if we utilized the methods from 1980, 1990, 2000 to calculate.
You should be able to go back in time on the BLS website for any of the methods currently used (U1-U6). I always look to U6 for the "real" unemployment rate.
Posted on 12/5/16 at 10:40 am to I Love Bama
quote:
I guess what I am trying to see is what is the unemployment rate if we utilized the methods from 1980, 1990, 2000 to calculate.
they changed the way it was calculated in the early 90s. You would likely get the same number in 2000 as you do now, but it would definitely be different than 1990 or 1980.
The the early 90s, they added classifications for unemployment, thus the U3, U6, etc.
I believe the numbers are correct, the issue is that the wrong number is published - U3, and U6 is what matters. I think U6 is right around 9% which seems more correct than 4.7%
Posted on 12/5/16 at 10:49 am to Hawkeye95
quote:
I believe the numbers are correct, the issue is that the wrong number is published - U3, and U6 is what matters. I think U6 is right around 9% which seems more correct than 4.7%
U-6 includes part-timers, and it doesn't seem right to call them "unemployed." That number might be useful, but it's not an unemployment number. I think U-4 takes the normal unemployment number, then adds the people who have dropped out after however many weeks. That seems like a more useful number to me.
Posted on 12/5/16 at 11:04 am to Cold Cous Cous
quote:
U-6 includes part-timers, and it doesn't seem right to call them "unemployed."
Its part timers that work part time but would like full time work.
I think its good to include it.
u6 - 9.3%
U4 - 5%
U5 - 5.8%
That is a pretty big jump though, so maybe you are right. I do think u5 is better than U4 though as it includes those who just gave up on looking, which I think still counts as unemployed.
This post was edited on 12/5/16 at 11:07 am
Posted on 12/5/16 at 11:32 am to Hawkeye95
I know many states lowered their unemployment benefits. For example, Illinois used to be at 99 weeks of unemployment benefits and now they cut that to 26 weeks. Curious to know if the people who take unemployment for the full 26 weeks, what happens to their status with the DOL after the 26th week, are they still considered unemployed or are the considered to be employed?
This post was edited on 12/5/16 at 11:33 am
Posted on 12/5/16 at 12:35 pm to Chiefagain
quote:
Illinois used to be at 99 weeks of unemployment benefits and now they cut that to 26 weeks.
26 weeks is pretty standard. In times of high unemployment, it can be raised to 99.
Getting or not getting benefits does not count in the rate. You are employed, unemployed and looking, or not looking.
Posted on 12/5/16 at 1:05 pm to Hawkeye95
quote:
Its part timers that work part time but would like full time work.
Right but it gets tricky once you start making value judgments as to what "underemployment" means. I'm worth twice what my boss is paying me - how's that any different than someone working 20 who wants 40? So throw me in that number too.
At the same time if someone is working 15 hours a week at $8 an hour because that's the only gig he can find, it would be hard to look him in the eye and tell him he's employed.
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