12E.5.5 Employment Situation Summary

Background The Bureau of Labor Statistics (BLS) collects information about employment and labor each month through the Current Population Survey (CPS). The Monthly Household Survey Data in the “Employment Situation in July 2019” uses this survey to report more than just the unemployment rate. The employment situation further defines employment and unemployment and addresses those who are not included in the unemployed category. Questions Who is counted as unemployed? Who are the long-term unemployed? Are they counted as unemployed in the unemployment rate calculation? Who is not counted as unemployed? Who are “marginally attached workers,” and why are they not defined as unemployed? Who are “discouraged workers” (a subset of marginally attached workers), and why are they not defined as unemployed? How many people are currently unemployed as of July 2019? How many more are unemployed but not counted? According to this source, what are the limitations of unemployment data?

Using this source, students can double check their interpretation of the current unemployment rate from the graph in Source 1. This source also adds to the definition of who is considered unemployed and employed, elaborates on who are considered the long-term unemployed and part-time workers, and discusses the limitations of the unemployment rate in terms of those who are not included in the unemployment rate, specifically marginally attached and discouraged workers. The “Employment Situation” is released each month by the BLS. The full report includes the Monthly Household Survey Data, based on the Current Population Survey (CPS), and the Current Employment Statistics (CES), based on workers who are on payrolls. Together they form the “Employment Situation,” which is more commonly called the “Monthly Jobs Report.” According to the BLS, these reports “serve as the first economic indicator of current employment trends each month and are used to help gauge the overall health of the U.S. economy.” Although the CES dates to 1915, the CPS was conceived in 1940 as a Work Projects Administration program during the Great Depression. The Monthly Household Survey Data in the “Employment Situation in July 2019” uses this survey to report more than just the unemployment rate. The employment situation further defines employment and unemployment and addresses those who are not included in the unemployed category. The key components of the source are defining who is counted as unemployed and who is not counted as unemployed and focusing on the element of “actively looking for work.” The long-term unemployed — those without a job for 27 weeks (9 months) or more who were still looking for work at the time of the survey — are counted as unemployed. Marginally attached workers are not counted as unemployed because, although they were able to work and had looked for a job within the past year (12 months), they had not looked for a job in the four weeks prior to the survey. Discouraged workers, a subset of marginally attached workers, are those who want and are able to have a job and had been looking for a job for 12 months but are now no longer looking because they believe a job for them is not available. The key difference between the long-term unemployed and the marginally attached is whether the survey participants looked for a job in the four weeks prior to the CPS (long-term unemployed) or not (marginally attached workers). The key difference between marginally attached and discouraged workers is that discouraged workers have stopped looking for a job altogether, not just in the four weeks prior to the survey. It is also important to acknowledge the increase in the number of unemployed when the marginally attached, including discouraged workers, is added. In July 2019, 6.1 million people were unemployed. With the marginally attached of 1.5 million, the total unemployed would have been 7.6 million. Note: Since the definitions and information are dense, it was decided not to address part-time workers in this lesson.

Economic News Releases: Employment Situation
Note: This is excerpted and will change monthly

THE EMPLOYMENT SITUATION — JULY 2019

Household Survey Data

The unemployment rate held at 3.7 percent in July, and the number of unemployed persons was little changed at 6.1 million.

In July, the number of persons unemployed less than 5 weeks increased by 240,000 to 2.2 million, while the number of long-term unemployed (those jobless for 27 weeks or more) declined by 248,000 to 1.2 million. The long-term unemployed accounted for 19.2 percent of the unemployed.

In July, 1.5 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. These individuals ... wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 368,000 discouraged workers in July, down by 144,000 from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in July had not searched for work for reasons such as school attendance or family responsibilities.