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Take it easy SevtnXu,
if you know how to figure out unemployment rate, you will get your answer, right?
Here is how could you get your first step done.
The national unemployment rate is computed solely from a nationwide survey of about 60,000
households conducted by the Census Bureau for the Bureau of Labor Statistics. Residents of
selected households are asked, among other questions, about their employment status. From their
responses, the Bureau of Labor Statistics then estimates the size of the labor force – all people
employed and unemployed – and the number of people who are jobless.
The Bureau of Labor Statistics (BLS) is responsible for the concepts, definitions, technical
procedures, validation, and publication of the estimates that all state workforce agencies,
including the Connecticut Department of Labor, prepare under agreement with BLS. It follows
then that Connecticut’s unemployment rate and the rates for its individual labor market areas,
cities and towns are computed by the Office of Research of the Connecticut Department of Labor
in accordance with BLS procedures. With all states using the same procedures, the resulting data
are comparable across the country.
The portion of the national household survey sample taken in Connecticut (and other states) is
too small by itself to produce estimates for the state that are reasonably reliable. Consequently,
alternative methods and additional information must be used. For all states and the District of
Columbia, statistical models have been developed to estimate the number of residents that are
employed and unemployed. The models use time series regression techniques that are based on
historical and current data for each state's economy. While all the state estimation models have
important components in common, they differ somewhat from one another to better reflect
individual state labor force characteristics.
The primary components of the state estimation models are the results from state residents’
responses to the household survey, the numbers of persons filing claims for unemployment
insurance and the current estimate of nonfarm jobs in the state. The inclusion of the household
survey results ensures that people who have exhausted their unemployment benefits are
represented in the estimate of unemployed state residents. It also accounts for new entrants and
re-entrants into the workforce, those who exhaust unemployment benefits and are still looking
for work, those found ineligible for benefits or who simply choose not to file, and others not
covered by unemployment insurance such as some agricultural workers, private household
workers, self-employed, and unpaid family workers.
To account for predictable movements in employment that occur during the same periods every
year (usually associated with the seasons; e.g., summer school break activity, winter construction
slowdowns, temporary holiday retail employment), the data are “seasonally adjusted;” that is, the
customary seasonal activity is removed from the estimates. This seasonal adjustment allows for
better identification of underlying trends in the economy from one month to the next.
Each month, BLS independently develops estimates for the nine Census divisions that
geographically exhaust the nation. These Census division estimates are aligned with the data
produced for the nation. The division estimates are then used to align the estimates for the states
within each division. This process ensures that the monthly state estimates will add to the
national figures.
The labor force estimates for each month are revised the following month and at the end of each
year as more current information becomes available on nonfarm jobs and unemployment claims,
and from the household survey and other Census Bureau sources.
The official unemployment rate, discussed above, has specific limitations. It does not
differentiate between full-time and part-time jobs. It also does not account for people who are
underemployed; that is, working in jobs for which they are overqualified because they cannot
find a job that better matches their knowledge and experience. It will not tell you how many
people have become so discouraged in their job search that they have given up hope of finding a
job. However, there are alternative measures derived from the household survey that provide
estimates of unemployment that include these groups.
As these are estimates, based largely on a sample, there is a margin of error in the calculations.
Currently, Connecticut’s statewide unemployment rate for any month has a margin of error of +/-
0.7-0.8 percentage point, with 90% confidence that the true rate (if the entire population could be
surveyed) falls within this range. The error range on the annual average is +/-0.4 percentage
point. Generally, estimates for smaller areas are less precise than for larger areas. Nevertheless,
the unemployment rate provides a reasonable approximation of what it is supposed to measure.
In summary,
the methods used to produce the employment rate are not so simple, right?
I hope it helps.
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