I tried unsuccessfully to tune out Fox News blaring in the diner where I had breakfast yesterday. With some characteristic outrage, host Megyn Kelly reported that the 9.5% unemployment rate does not even include those people who have been jobless so long they've exhausted unemployment benefits--an error repeated minutes later by a FOX economic correspondent. One could argue from many angles that 9.5% underestimates the number of jobless, but the figure has nothing to do with the number of people collecting unemployment. Read on for a brief outline of the methodology the Department of Labor uses to calculate the unemployment rate.
Every month, in the week that includes the 12th, the US Census Bureau conducts a survey of 60,000 sample households across the country.
Members of any sampled household older than 16 who don't have a job and are not looking for work are not counted as part of the 154 million estimate of the overall available labor force. That would include anyone who hasn't made an active effort to seek employment in the four weeks prior to the survey, even if they've been laid off and looking for new employment so long that they've become discouraged and given up the search. Daniel Indiviglio wrote something more about "discouraged workers" on this site last week.