The Economic Perspective: “Problems with the Unemployment Rate”

Mary:    I’m Mary Walden with economist MW welcoming you to the economic perspective.  Today’s program looks at problems with the unemployment rate.  Mike, we’ve had some surprisingly good news about the unemployment rate, in the form of recent large declines at both the national and North Carolina levels.  Yet I understand some economists are cautioning about getting too excited about those reports.  Is this just a case of throwing some cold water on good news?

 

Mike: Summary Answer

  • Not at all
  • There is always a caution with the unemployment rate, due to the way it is calculated
  • To be counted as unemployed, need to be without a job, wanting a job, and actively looking for a job
  • Federal government does surveys each month asking these questions to a sample of workers
  • If without a job and stop looking, rate still falls
  • This is what recently happened
  • Suggestion – look at job gains
  • 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.