The Economic Perspective: “How Is the Jobless Rate Calculated?”

Mary: This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program asks, how is the jobless rate calculated.  Mike, the unemployment rate numbers for in the nation and North Carolina will likely be very ugly in coming months.   This is because of the economic restrictions put in place to control the coronavirus that have resulted in large parts of the economy being closed.  But will these unemployment rates tell the true story of the impact on the labor market?

Mike:  Summary Answer

  • Not necessarily – may understate
  • See large numbers of people file for unemployment compensation
  • Yet unemployment numbers from a separate survey
  • To be counted as unemployed, have to be jobless and looking for a job
  • Thought is that many who are newly jobless won’t be looking for work, because they know jobs are available
  • So could very well see the official unemployment rate understate the real rate
  • I’m MW

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.