Measuring unemployment
Not all people who don’t work are unemployed. To be considered unemployed for government statistics, a person must not only be out of work, but also be actively looking for a job—for example, by sending out resumes. In the United States unemployment is measured by a monthly survey of households conducted for the Bureau of Labor Statistics and covers a representative sample of more than 100,000 individuals. The labor force includes both those with jobs and those looking for them. The unemployment rate is the percentage of the labor force that is looking for a job. The labor force is only a portion of the total population. The ratio of the labor force to the working-age population is called the labor force participation rate.
The labor force excludes people who are of working age but are neither employed nor looking for a job—such as students and homemakers. But the labor force also leaves out jobless people who were in the job market unsuccessfully for so long that they stopped looking for a job. Such discouraged workers are one reason why unemployment statistics can underestimate the true demand for jobs in an economy. Another form of hidden unemployment in statistics comes from counting as employed anyone who did any work for pay (or profit, if self-employed) in the week before the government survey. This hides the demand for work by people who would prefer full-time employment but cannot find it.