How does the Bureau of Labor Statistics come up with unemployment rates? Well…
Because unemployment insurance records relate only to persons who have applied for such benefits, and because it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940 when it began as a Work Projects Administration program. It has been expanded and modified several times since then.
Note the “ it is impractical to actually count every unemployed person each month.”
Why?
While it is impossible to count each person, this is important due to the fact that the government sample pool does not include people who are no longer eligible for unemployment benefits.
When the unemployment rate drops when companies are NOT hiring it is due to situations like this:
Another day, another 7,000 people run out of unemployment benefits.
As the Senate debates whether to extend unemployment benefits, more than 200,000 jobless Americans are set to see their checks stop in October.
Remember this if the reported unemployment numbers seem ‘off’ to you in the next several months.
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