Unemployment rate is a key economic indicator that is widely recognized as a major factor in determining monetary policy and strategic economic decisions. It is also a major concern to those who are still working, because it affects their purchasing power and erodes their morale.
The Bureau of Labor Statistics collects unemployment data through a monthly survey of civilians 16 and older, called the Current Population Survey (CPS). It asks respondents whether they are currently employed or seeking employment. This includes people who are working part time but want full-time jobs, and it excludes retirees and those who are discouraged from looking for work. The CPS has been conducted since 1940, when it was originally a project of the Works Progress Administration. It was later renamed the Current Population Survey and then shifted to the Census Bureau in 1994.
Structural unemployment is the result of business cycles and other factors that influence the demand for certain types of labor. For example, advances in technology can cause older industries to shrink and lay off workers. This can create high structural unemployment rates. For instance, the rise of online advertising over the past decade has caused many newspaper reporters, editors, printers and delivery workers to lose their jobs. This has led to a sharp increase in the U.S. structural unemployment rate.
The official unemployment rate is calculated by adding up the number of unemployed people and dividing that by the total civilian labor force. It is measured as a percentage of the population and reported each month in The Employment Situation, which is released in conjunction with other national summary statistics on jobs, wages and inflation. A variety of other measures of unemployment exist, including the U-1 measure for people who have been out of work for 15 weeks or more, and the U-3 figure that adds up all unemployed persons, plus those who have stopped looking for work because they believe there are no jobs available, and the U-5 measure that adds those marginally attached to the labor force.