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Calculating the Unemployment Rate

In recent months, there has been a lot of attention given to the unemployment rate of the United States. It has increased to record high levels in recent months due in part to the instability in the financial markets and a general slowing of the economy.

While it sounds simple to calculate the unemployment rate, it is not as uncomplicated as many make it out to be. In simple terms, the unemployment rate is the number of people without jobs divided by the total number of people in the labor force.

The national employment rate is determined through surveys conducted by the Census Bureau. On a regular basis, the Census Bureau conducts a Current Population Survey (CPS). This survey is performed by contacting roughly 60,000 families. Once contacted, the families are asked questions about their work experience. From these responses, the Bureau of Labor Statistics is then able to estimate the size of the labor force and the number of people who are unemployed.

To qualify as unemployed for purposes of the survey, an individual must be currently without a job. In addition, he or she must be actively searching for work. If a person is not actively searching for work, he or she isn’t really unemployed. That person is more choosing not to work.

So really, the work force is the total number of people that are working or actively searching for work. Full employment is considered to be 5% unemployment. It is said this is true because there will always be some people who have quit one job and are still searching for another job.

Contact a Boston Bankruptcy Lawyer

If you are unable to meet your bills due to unemployment and are considering filing for bankruptcy, contact the Boston bankruptcy attorneys of Joshua Spirn & Associates at 1-800-975-5346.