By A. Zych
The past several weeks concerning the political arena an overshadowing issue that precedes the Presidential Debates is an important issue of today’s economy the unemployment rate of 7.8%. With it lower than originally thought in contrast some analysts are saying this number do not represent the whole truth of our country’s well-being where the economy is concern. Additionally, some political pundits say it is too coincidental with it being less than thirty days to the election. For most of us it is not political it is about our lives and well-being of our family, friends and the country.
Instead of listening to the media and political figures I have done some research on how the government gathers data to get the number in which can determine how markets react either negatively or positively, consumer confidence as well as the reputation of America to those abroad.
Several questions have come to mind, the misconception that most of us think that weekly jobless claims for benefits are counted in the statistics for the unemployment rate however according to the U.S. Bureau of Labor and Statistics claims has little to do with the complete assessment of those who are unemployed. (1.) For the most part this number can give a good indication of the current job market.
The infamous number also calculated on what is called a Current Population Survey, which consists of 60,000 households and about 110,000 individuals. The data are collected through a questionnaire and interviews in a 4 month period and then a year later. The chosen individuals come from all walks of life with characteristics: age, gender, race, as well as education and skill level. Furthermore, the BLS employee who conducts these interviews is highly trained to assess activity of the interviewees of those individuals in the household’s selected for the CPS sample. The statuses of those selected are in three general categories: currently employed unemployed and currently looking for work and not in labor force. (1. P-3)
The categories are first determined by series of questions for instance, a person may answer they were laid off in the middle of the week and just applied for unemployment benefits. Therefore the interviewer would conclude that this person is employed because they worked during the week of the survey. (1. P.5) There are many other examples ranging from a full-time student attending college to a stay at home mom working in the home as categorized as not in the work force. Another point to be made is the fluctuations of those who are seasonally laid off a statistical adjustment are made so the data reflects a more realistic picture. Lastly, some of the survey characterized those who are marginally attached to the labor force which means these persons want a job and have been looking for a job in the past 12 months. (1.P6)
There may be some flaws of the CPS like most surveys there can be a margin of error, according to the U.S. Bureau of Labor and Statistics, “…chances are 90 out of 100 that the monthly estimate of unemployment from the sample is within about 290,000 of the figure obtainable from a total census. “ (1. P2)
To sum up the myth of the number is no more and it is a good assumption that a lower unemployment rate can give a good indication of a healthy economy or not. According to CNN the current unemployment rate from a year ago is down from 9.0% to 7.8% last month. (2.) So let’s not take away from the progress, this is what America really needs right now is some good news and indication of tide changing and heading in the right direction. In contrast the true test will be the months to follow a continual trend that shows a consistent recovery not just in the unemployment rate but in jobs added as well as an improvement in Gross Domestic Product as good indication income growth.
The November 6th election is an important one and it is so important to make sure that America has a Commander-in-Chief that will ensure that this country continues on a path of recovery and growth. In addition to officials in both House and Senate to ensure good economic policy that will promote job and income growth. A recovery for middle class because it is those Americans who are the economic engine driver in our country! I look forward to your comments and ideas.
(1.) U.S. Bureau of Labor and Statistics http://www.bls.gov/cps/cps_htgm.htm