Friday, March 6, 2015


Each month, the Division of Current Employment Statistics of the U.S. Bureau of Labor Statistics of the U.S. Department of Labor releases a report known as the Employment Situation Summary. The DCES of the BLS devises the ESS from two surveys, the Current Population Survey (CPS) and the Current Employment Statistics (CES).

These monthly surveys provide sample-based estimates of employment of Americans. The CPS, is also known as the household survey. The CES is also known as the establishment as well as the payroll survey. For more on the details of each, see the end.

The unemployment rate as reported in the Employment Situation Summary is the ratio expressed as a percentage of the number unemployed to the number known as the civilian labor force.

The civilian labor force is defined as the sum of employed persons and those persons who looked for work anytime during the four weeks leading up to what is known as the reference week, which is the week that has the 12th day of the money.

The unemployment rate is highly misleading. The "unemployment rate" doesn't really reveal the rate of Americans who could work and would like to work but don't work.

The ESS "unemployment rate" fails to measure unemployment. The unemployment rate as reported by the ESS is the ratio of the most recent job seekers to the sum of themselves and those with jobs, whether full-time or part-time. As a measure, it helps employers know if they need to meet wage raise demands of existing workers or if they can replace disgruntled workers idle workers. The lower the number, the greater the likelihood employers need to meet raise demands.

A true not working rate would be the ratio of the true working potential to the true free Americans. To calculate this ratio, one would need to look at the sum of recent job seekers (unemployed), those who want to work but who are not recent job seekers and those who have looked for work but not in the last four weeks in ratio to the total civilian population, which are those not in the military, not in mental hospitals and not in prisons or county jails, less those who don't work and who are disabled and are aged at least 16.

That ratio comes out to 7.88% rather than the ESS reported ate of 5.5% (as of this writing).

Below is a live dial that updates monthly.

About the surveys

The payroll survey workers gather data from about 144,000 businesses and government agencies that account for about 554,000 work sites throughout the USA.  The household survey workers gather data from about 60,000 eligible households designed to reflect the entire civilian noninstitutional population. 

An over-the-month employment change of about 100,000 is statistically significant in the payroll survey. An over-the-month employment change of about 400,000 is statistically significant in household survey.

The payroll yields data on on employment, hours, and earnings of employees on nonfarm payrolls. The payroll survey includes all those on payrolls getting paid.  Employees working at more than one job and thus appearing on more than one payroll are counted separately for each appearance.  About 40% of the payroll survey sample is comprised of business  establishments with fewer than 20 employees.

The household survey yields data on the labor force, employment, unemployment and those not in the labor force. The household survey includes data on Americans working but not getting paid. The household survey includes agricultural workers, self-employed workers whose businesses are unincorporated, unpaid family workers, and private household workers among the employed. The household survey includes people on unpaid leave among the employed. The household survey limits those surveyed to those 16 years and older. The household survey has no duplication of individuals, because individuals are counted only once, even if they hold more than one job.

For the household survey, Americans get classified as employed if they worked at all as paid employees during the reference week; worked in their own business, profession, or worked on their own farm; or worked without pay at least 15 hours for a family business or farm. The surveyors count Americans as employed if they were temporarily absent from their jobs because of illness, bad weather, vacation, labor-management disputes, or personal reasons.

People are classified as unemployed if they meet all of the following criteria:
they had no employment during the reference week; they were available for work at that time; and they made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons laid off from a job and
expecting recall need not be looking for work to be counted as unemployed.

No doubt, many Americans await for a legit recovery in the economy so they can sing this song to their bosses.

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