Unemployment Rate
Data Source:
U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS). Please see
http://www.bls.gov/lau/ for additional information.
Details:
Local Area Unemployment Statistics data provide monthly, sample-based estimates of
the size of the labor force, employment, and unemployment. The unemployment rate is
calculated by dividing the unemployed population by the total labor force.
Data are provided at the level counties and equivalent jurisdictions. LAUS statistics are
updated monthly, and cover up to within one month of the current date.
The Voorhees Center obtained these data via a flat file download, October 20, 2009.
Uses:
The unemployment rate provides a current and easily understood measure of the impact
of broader economic trends on a region’s workforce. Where measures such as Gross
Domestic Product document the aggregate growth (or decline) of a region’s economic
output, the unemployment rate shows the bottom-line impact of these economic trends on
workers and the labor market.
Due to the stress that unemployment places on state- and locally administered services
such as food stamps, unemployment insurance and Medicaid, upward movement in the
unemployment rate likely suggests stress in municipal, county and state budgets.
At the industry level, unemployment rates vary. While the Local Area Unemployment
Statistics data series does not provide industry-by-industry information, consulting other
economic data sources, including the Quarterly Census of Employment and Wages and
Local Employment Dynamics, can provide local data analysts with a picture of which
industries are experiencing unemployment, and how their labor-force needs are changing
as a result.
Flags:
Although popular press accounts frequently use the unemployment rate as a measure of
overall economic health, the unemployment rate is limited as a tool for economic
diagnosis. Growth and decline in the unemployment rate often lag behind overall changes
in economic growth, and periods of sustained economic growth can have little impact on
unemployment. For example, most economic analysts agree that the U.S. economy began
growing, after nearly two years of recession, in the third quarter of 2009. However, the
national unemployment rate has continued to climb after this reversal.
The reported unemployment rate can vary considerably in response to changes in the size
of the Labor Force. The Bureau of Economic Analysis counts as active members of the
Labor Force only those individuals who are currently seeking work. This means that the
reported unemployment rate fluctuates in response to unemployed workers growing
discouraged and opting out of the labor force altogether. During booming economic times
(such as the late 1990s), the size of the Labor Force increases, as workers with weak
labor market credentials and a history of unemployment begin once again to look seek
work. The impact of this influx is that the unemployment rate may stay stable, even as
total employment in the economy rises.
During recessions, the process is often the opposite. The disappearance of labor-market
opportunities drives many individuals to stop seeking work. At that point, they are no
longer counted as part of the labor force. For practical purposes, this may result in the
effective under-reporting of the unemployment rate, as these marginal job-seekers are
reclassified from unemployed to non-participants in the workforce.