economicpolitics

The past few months have been very poor for employment. Many of the numbers that we are seeing are the worst in several decades. What are the key numbers, what do they mean, and how bad have they been lately?

There are three numbers that are released regularly by the Federal Government that are most widely used to reflect the current employment situation. One is the Unemployment Insurance Weekly Claims Report. It is released on Thursday mornings at 8:30 by the Department of Labor. The report contains the number of new claims for unemployment benefits, as well as revisions to the previous two weeks. It also reports a four-week running average for this number, which helps smooth out the data and give a clearer sense of the current trend. The report also gives the total number of people who are currently receiving unemployment benefits, and its four-week running average. These data are presented in raw form, but also as the percentage of the current total number of workers who are covered by unemployment insurance. This allows comparisons across time, when the total population was different.

The other two numbers are both released once a month, also by the Department of Labor (DOL). The Employment Situation Report contains the number of jobs created (or lost) and the unemployment rate for the most recent month. The number of jobs created/lost is determined from a monthly survey of businesses, called the Establishment Survey. This survey provides an estimate of the total number of people that are employed. The difference between the number from that of the previous month provides the number of jobs created or lost, usually just called the jobs number. The unemployment rate comes from the Household Survey, which involves contacting a large number of households each month and assessing the employment situation for everyone in residence. Based on responses, people are classified as employed, unemployed, or not in the labor force. The sum of those employed and unemployed is the labor force. The unemployment rate is simply the percentage of the labor force that is unemployed.

There are problems with the way that each of these numbers is tallied. I will address these issues in coming posts.

So, where do we stand? For the week ending March 7, 2009, there were 654,000 new people claiming unemployment benefits. This is slightly down from two weeks earlier when they reached 670,000. These are the highest levels since 1982. Continuing claims now total 5,317,000, which is the highest total in the 41-year data set available from the Department of Labor. The jobs lost in January totaled 598,00, which is the worst number in the 34-year-old data set available from the DOL. The unemployment rate stands at 8.1%, the worst since 1992.

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