There is a lot of misinformation and spin going on with regards to unemployment numbers. What does it mean when the government says that unemployment is down? How can the unemployment rate be decreasing when the news is full of stories about young people with college degrees serving lattes at Starbucks? Does that really count as a job?
First of all, there are several numbers that could be called the "unemployment rate". The US Bureau of Labor and Statistics collects data each month via surveys that go out to 60,000 households. When this data is collected and extrapolated for the country as a whole, we get the unemployment rate, or more specifically the U3 number, which is people out of work who are actively looking. As of this blog post, the latest U3 number is 6.1%. But what about these people who have dropped out of the work force? Where do they get counted?
People who have stopped looking for various reasons are counted in the U4 number which is currently 6.5%. If we examine people who have stopped looking for work then we should check the U5 number, which is currently 7.3%. This number includes people who might have been looking over the past year and would like to have a job, but they're taking a break from searching. Perhaps this is someone who is tired of rejections from employers and has decided that the timing is bad.
There are additional numbers rolled into unemployment (U1, U2, and U6) that incorporate younger workers and temporary workers, but those are less representative of what we might consider the unemployment rate. The official government rate is always the U3 number, which might be somewhat misleading - people who want jobs but are waiting for the market to improve should arguably be counted amongst unemployed people.
A common question is "who are these people who have given up looking for employment?" After all, in most states you cannot receive unemployment benefits unless you show that you are actively looking for work - this usually accomplished through weekly phone calls, website log-in, or a visit to an unemployment center. Sometimes people who have given up on searching for a job find work that pays cash only, leaving no records for the IRS to come after. Other people have a partner who continues to work and support the both of them.
Regardless of which unemployment number you consider, the point is not to let the numbers depress you. Consider the fact that even a 10% unemployment rate means that 90% of people who want to work are working. Even in the worst of recessions in the United States, the Great Depression in the 1930s, the unemployment rate never got above 25%, which means 75% of the population was still working.
Do you find monthly unemployment numbers motivating or demotivating during your job search?
