Unemployment data are important because they show whether the economy is creating jobs or not. When workers are jobless, they and their families lose money and purchasing power. The economy also misses out on the goods and services they would have produced. The government collects unemployment data by interviewing a random sample of households each month. These interviews are conducted by trained and paid interviewers. The data are then processed by a computer program that assigns each household a labor force status based on their answers.
The most important unemployment number is the headline unemployment rate. This is based on the number of people who have actively searched for work in the past four weeks. The BLS also publishes a range of alternative measures that show different aspects of labor underutilization. These include the U-1, U-2, U-3, U-4, and U-5 rates.
To get the most accurate picture of unemployment, it is important to remember that there are many people who do not participate in the labor force. This includes incarcerated individuals, children, the elderly, and those who are receiving disability benefits. Discouraged workers, who have given up their search for employment because they believe there are no jobs available or they lack the skills to find a job, are also not counted as unemployed.
The unemployment data are collected through a monthly survey of about 60,000 households called the Current Population Survey. In addition to collecting information about employment, the survey asks about a variety of other personal characteristics. These are used to produce statistics on such things as race, educational attainment, and age. The information is published in a monthly news release titled The Employment Situation and can be accessed through various database tools.
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