Unemployment is a key economic indicator and it can have an impact on the economy as a whole. When people are out of work they cannot spend money on things like food and clothing, thus slowing the growth of the economy. The Bureau of Labor Statistics reports the unemployment rate each month. The unemployment rate measures the percentage of people who are jobless and looking for employment. It is important to note that not everyone who is out of a job is considered unemployed. To be counted as unemployed you have to be out of a job, actively looking for work and available to take a job if one is offered to you. People who have given up looking for a job or who are working part time but would prefer full-time work are considered to be out of the labor force.
The BLS uses the Current Population Survey to collect the data that is used to calculate the unemployment rate. The CPS has been conducted monthly since 1940, starting out as a Work Projects Administration program and later taken over by the Census Bureau in 1942. The CPS is a household survey that interviews 60,000 households each month and asks them questions about their employment status. The CPS survey can be broken down by various factors including race, age, veteran status, gender and geography which helps to give a more detailed picture of the job market.
The BLS produces a range of unemployment measures from the U-1, which is very strict, to the U-6, which is the most comprehensive measure of labor underutilization. Different measures are calculated using different samples and differ in how they define who is out of the labor force.
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