How the unemployment rate is calculated

  • By Reid Kanaley The Philadelphia Inquirer
  • Wednesday, November 13, 2013 2:18pm
  • Business

October’s jobless rate, pegged at 7.3 percent, was up slightly from September. But the number’s meaning is a source of monthly public confusion. Here are some explanations.

•The arm of government that computes the unemployment rate is the Labor Department’s Bureau of Labor Statistics. This FAQ on the bureau’s site explains how the number is reached and what it means. It starts with the question “Why does the government collect statistics on the unemployed?” When a willing worker is unemployed, everybody loses, it explains. “Workers and their families lose wages, and the country loses the goods or services that could have been produced.” And without income to spend, one job loss can lead to another. tinyurl.com/BureauFAQ

•The opposite of an unemployment rate would be the employment rate — the percentage of available workers who actually have jobs. At About.com Economics, Jodi Beggs explains the obvious, but seldom, referenced figure. An unemployment rate of 7.3 percent means 92.7 percent of the workforce has a job, though many in that group may be working part time, or at jobs that are poorly paid, or for which they are overqualified. All those are called the underemployed. tinyurl.com/MeasuringUnemployment

•If you are underemployed, what to do? Jay MacDonald, at Bankrate.com, says it is possible in some cases to collect unemployment benefits when your job is cut way back. “The bad news is, too much part-time work could cost you your underemployment benefits,” MacDonald writes. tinyurl.com/UnderemployedBenefits

•Alternative unemployment rates abound — compiled by independent and governmental groups. The Bureau of Labor Statistics’ own monthly page of “alternative measures” offers a selection of rates going as high as 13.8 percent for October. That number represents a seasonally adjusted rate for the total of the typically counted unemployed, “plus all persons marginally attached to the labor force, plus total employed part-time for economic reasons.” That 13.8 percent figure was down from 14.5 percent in October 2012. tinyurl.com/AlternativeMeasures

•Interesting, and much-criticized, alternative numbers come from Shadowstats.com, by Walter J. “John” Williams, who contends government numbers are manipulated for political reasons. You be the judge. shadowstats.com

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.