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INTRODUCTION

Each month, the Bureau of Labor Statistics (BLS) releases data from the monthly "Household Survey" conducted by the Bureau of the Census, providing a comprehensive body of information on the employment and unemployment experience of the U.S. population, classified by age, sex, race, and a variety of other characteristics.

The BLS also conducts the Current Employment Statistics (CES) program, surveying about 150,000 businesses and government agencies, representing approximately 390,000 individual work sites, in order to provide detailed industry data on employment, hours, and earnings of workers on nonfarm payrolls.

The BLS compiles information from these sources and announces the monthly "Employment Situation," reporting the current U.S. employment and unemployment data estimates. The monthly announcement reports employment data from the previous full month.

This lesson is about the March 9, 2012, BLS announcement, "Employment Situation: February, 2012."  This lesson will also look at regional data and industry trends.

TASK

  • Review the most recently reported U.S. employment and unemployment data.
  • Determine the changes in U.S. employment and unemployment from the past month and year.
  • Determine the factors that have influenced the change in the U.S. unemployment rate.
  • Explain the implications of the employment and unemployment data for individuals, population groups, and the U.S. economy.

PROCESS

The U.S. economy added  227,000 jobs in February, 2012, after adding over 500,000 new jobs in December 2011 and January 2012.   Despite all of those new jobs, the U.S. unemployment rate remained at 8.3 percent in February, as 576,000 people entered or re-entered the labor force.

Remember, the “unemployment rate” is determined by a fairly simple formula.  It is the percentage of the labor force that are unemployed.  The “employment rate” is the simply the opposite, the percentage of the labor force who are employed, according to the Bureau of Labor Statistics’ definition of “employed.”

The actual determination of the rate – measuring the size of the labor force, how it changes, and determining who is employed or unemployed - is not so simple.  Take the February, 2012, employment data for example.  While more people may be working, as happened in February, the labor force increased by even greater numbers and the unemployment rate remained the same as January.

Students:  Can you "do the math" to determine the unemployment rate.  Can you define the terms "labor force" and "unemployed."

Take a close look at the February, 2012, labor force, employment, and unemployment data to better understand the meaning of the unemployment rate.

Note:  Unless otherwise cited, all quoted materials in this lesson are from the March 9, 2012, BLS "Employment Situation" announcement.

The Employment Situation – February 2012
U.S. Bureau of Labor Statistics
Released: March 9, 2012

"Nonfarm payroll employment rose by 227,000 in February, and the unemployment rate was unchanged at 8.3 percent. Employment rose in professional and businesses services, health care and social assistance, leisure and hospitality, manufacturing, and mining."

The U.S. unemployment rate has gradually decreased from a recent high of 10.0 percent in October 2009 to the current (January and February 2012) 8.3 percent. 

Figure 1, below, shows the monthly U.S. unemployment rates from 1990 tot he present.  Note the highest recent rate in October, 2009.

figure 1

Total U.S. employment has increased from a low of 137,968,000 in December, 2009, to the current level of 142,065,000.  In that period of time, the U.S. economy has created just over 4 million jobs.

The number of U.S. unemployed persons has decreased from a recent high of 15,421,000 in October 2009 to the current 12,086,000. In this period, almost 3.36 million fewer workers are unemployed. 

How do these numbers add up to the unemployment rates during this time?  A key factor in the determination of the unemployment rate is the size of the labor force.  See Figure 2, below, for some key labor market data

figure 2

As indicated in Figure 2, although 227,000 new jobs were created in February, the labor force grew by 476,000.  The size of the population who were "not in the labor force" decreased in February by 310,000. The result is the unemployment rate remaining essentially the same from January to February.

Note: See the March 9, 2012, BLS "Employment Situation" announcement for more detailed information. http://www.bls.gov/news.release/empsit.nr0.htm

Recovery from the 2008-2009 recession seems to have finally picked up steam, both in employment and GDP growth.  Most of the recent recessions have been followed by much faster recoveries.  Again, look at Figure 2.  Note the “cycles” of increases, highs, decreases, and low rates.  These are generally consistent with the business cycles identified by the National Bureau of Economic Research (NBER). Link to NBER business cycle information: http://www.nber.org/cycles/general_statement.html

Students:  See the graphic of the business cycle, below.

figure 3

Students: Can you identify?

  • Periods of the recession since 1990.
  • The recessionary phase of the business cycles.
  • Relationship of the business cycle to employment trends. (See Figure 1.)
  • How does the 2008 to 2009 recession compare to the other recessions?
     

The February 2012 employment data showed some improvement.  The consensus estimate is that the economy must create 150,000-200,000 jobs each month just to keep up with population growth.  Take another look at the recent employment data (Figures 1 and 2). 

Have really we grown out of the recession?

Household Survey Data - Unemployment

The number of unemployed persons in February, 2012, was12.806 million people, up 48,000 form January, but down almost 300,000 from December. The unemployment rate in February remained the same as January, with almost one-half million people entering the labor force.Economic News Release

The BLS now collects more data on part-time employees who would like to work full-time, marginally attached workers, and discouraged workers.  These workers may represent “hidden unemployment.”   To be technically counted as unemployed, you have to be actively looking for work.  If you have given-up, you are no longer “unemployed.”  

Good news!  In February, 2912, the number of people working part-time for because they could not find full-time work decreased by 147,000.  Still, over eight million people were working part-time because they could not find full-time work or they because of economic conditions.

Students:  Should those who can’t find jobs suited to their skills, those who are involuntarily working part-time, or those who have given-up trying to find a job be counted as unemployed?

BLS Glossary

U.S. Unemployment is Not Distributed Equally

Among the major demographic groups, the unemployment rates in February, 2012, and changes from January to February were:

Group                             February 2012        One month change

All adults 8.3%     0
Adult men 7.7%     0
Adult women 7.0%     0
Teenagers 23.8%  + 0.5
Whites 7.3%  -  0.1
Blacks 14.1%  + 0.5
Hispanics 10.7%  + 0.2%
Asians   6.3%  -  0.4%

Table 1. Consumer Price Index for All Urban Consumers (CPI-U)

Question: Why are there such differences between the demographic groups?

Students: Almost 24 percent of teenagers (age 16-19) are unemployed and looking for jobs.  What impact might this have on the society and the teenagers?  Why are there such differences between ethic and racial groups?

Take a look at the unemployment rates for people with different levels of education in February, 2012.  Do you see a pattern?

 Less than a high school diploma 12.9% unemployed
 High school graduate   8.3% unemployed
 Some college, no diploma   7.3% unemployed
 College graduates   4.2% unemployed


For more information about unemployment rates and income for groups by educational attainment, go to this BLS website: Education Pays .

Establishment Survey Data – Employment

The March 9 BLS report added a comment about the industries that grew in February, 2011, “Private-sector employment grew by 233,000, with job gains in professional and business services, health care and social assistance, leisure and hospitality, manufacturing, and mining."

Take a look at the job picture in various industries.  (http://www.bls.gov/news.release/empsit.b.htm )  How do you characterize the February 2012 employment data?

  • What industries are growing? 
  • What industries are not growing or shrinking?
  • Are there patterns?

Students:  Does this pattern make sense to you?  What – if any – is the pattern? 

Regional and State Employment and Unemployment – February 2012

The BLS also collects and releases data on employment and unemployment in the several geographic regions of the nation, the states, and metropolitan areas. The most recent news release on state and regional unemployment data was on January 24, 2012 for December, 2011. The most recent news release on metropolitan area employment and unemployment data was made on February 1, 2012 for the month of December, 2011.

Job growth and unemployment has varied significantly between regions.  While California continues to have very high unemployment, North Dakota's unemployment rate was very low.

Regional and State Employment and Unemployment

"Regional and state unemployment rates were slightly lower in December. Thirty-seven states and the District of Columbia recorded unemployment rate decreases, 3 states posted rate increases, and 10 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Forty-six states registered unemployment rate decreases from a year earlier, while four states and the District of Columbia experienced increases. The national jobless rate, 8.5 percent, continued to trend down in December and was 0.9 percentage point lower than in December 2010." 

"In December, nonfarm payroll employment increased in 25 states and the District of Columbia, decreased in 24 states, and was unchanged in 1 state. The largest over-the-month increase in employment occurred in Texas (+20,200), followed by Indiana (+15,100) and California (+10,700). The largest over-the-month decrease in employment occurred in New York (-14,000), followed by Missouri (-11,800) and Washington (-11,600). South Dakota experienced the largest over-the-month percentage increase in employment (+1.1 percent), followed by North Dakota (+0.9 percent) and Indiana, Kentucky, and Utah (+0.5 percent each). Nevada experienced the largest over-the-month percentage decline in employment (-0.9 percent), followed by Alaska (-0.5 percent) and Maine, Missouri, and Washington (-0.4 percent each)."

"Over the year, nonfarm employment increased in 46 states and the District of Columbia and decreased in 4 states. The largest over-the-year percentage increase occurred in North Dakota (+5.7 percent), followed by Utah (+3.0 percent) and Oklahoma (+2.7 percent). The largest over-the-year percentage decrease in employment occurred in Delaware (-0.7 percent), followed by Alaska (-0.5 percent) and Georgia (-0.4 percent)."

State and Regional Employment and Unemployment Summary

Students: How is your area's employment and unemployment situation similar of different from other regions? Your State Employment Office may have more detailed information about employment in local areas and smaller cities.

Metropolitan Areas Employment and Unemployment

"Unemployment rates were lower in December than a year earlier in 329 of the 372 metropolitan areas, higher in 36 areas, and unchanged in 7 areas, the U.S. Bureau of Labor Statistics reported today. Ten areas recorded jobless rates higher than 15.0 percent, while 24 areas registered rates of less than 5.0 percent. Two hundred thirty-nine metropolitan areas reported over-the-year increases in nonfarm payroll employment, 127 reported decreases, and 6 had no change. The national unemployment rate in December was 8.3 percent, not seasonally adjusted, down from 9.1 percent a year earlier."

"Nonfarm payroll employment data were available in December 2011 for 32 metropolitan divisions, which are essentially separately identifiable employment centers within a metropolitan area. Twenty-four of the 32 metropolitan divisions reported over-the- year employment gains and 8 reported losses. The largest over-the-year increases in the metropolitan divisions occurred in New York-White Plains-Wayne, N.Y.-N.J. (+48,200), Seattle-Bellevue-Everett, Wash. (+36,900), and Boston-Cambridge-Quincy, Mass. (+32,100). The largest over-the-year decreases in the metropolitan divisions were in Nassau-Suffolk, N.Y. (-9,900), Bethesda-Rockville-Frederick, Md. (-5,700), and Wilmington, Del.-Md.-N.J. (-4,100)."

Students:  If your school is in a metropolitan area, compare your area to other metropolitan areas in your region.

Lowest and Highest Metropolitan Area Unemployment Rates

California continues to be the state hit with the highest unemployment rates in its metropolitan areas. The northern midwest/plains states enjoy some of the lowest unemployment rates.  Figure 4, below, shows the ten highest and ten lowest unemployment rates for all metropolitan areas and for the 49 largest metropolitan areas.

Do you see patterns?  Can you explain why some cities are very high or very low? 

figure 4

CONCLUSION

The U.S. economy added 227,000 jobs in February, 2012, but the unemployment rate remained high, at 8.3 percent - a mixed message.  Most industry groups gained jobs, but almost 13 million people in the U.S. remained unemployed.

What does this mean to you?  Good news or bad?

The unemployment rates for cities and regions across the United States vary greatly.  North Dakota and Nebraska are doing quite well.  California and Nevada continue to have very high unemployment rates.  The Northeast region is doing relatively well, especially when compared to the West region.  It seems like the states that had such high growth rates just a few years ago are now suffering. 

Is the old adage true, "the bigger they are, the harder they fall?"

Keep an eye on the employment data reports this spring for further signs of U.S. economic growth.

ASSESSMENT ACTIVITY

Students, click on the start button below to complete an interactive exercise to assess your knowledge of the Employment and Unemployment lesson.

Short Answer Questions: 

1.  What do you think accounts for differences in the unemployment rates between states and regions?

2.  What does the trend in the unemployment rate tell you about the health of the economy?

 

EXTENSION ACTIVITY

The last sections of the Employment and Unemployment lesson provide highlights of the state, region, and metropolitan area employment and unemployment data.

This data may not be quite as current as the national data that is released the first Friday of each month.  It takes a little longer to organize the localized data. 

Read the two BLS announcements:

  1. How does your state compare to the national average and surrounding states?
  2. Are there regional patterns of unemployment in your area that are higher and lower than the national average?
  3. Which five states had the highest unemployment rates last reported month?  Lowest?
  4. Did the unemployment rate decrease in any states last reported month?
  5. Why do you think your region or state differs from other regions or states, or the national employment and unemployment trends?