Focus on Economic Data: U.S. Employment and the Unemployment Rate, March 4, 2011
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 4, 2011, BLS announcement, "Employment Situation: February, 2011." 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 newspaper headline, March 5, 2011:
Big Jump in Private Jobs Bolsters Recovery Hopes
The U.S. economy added 192,000 jobs in February, 2011, but the U.S. unemployment rate remained high, at 8.9 percent - a mixed message at best.
The “unemployment rate” is determined by a fairly simple formula: 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, 2011, employment data for example. The number of non-farm jobs in the United States increased by 192,000, but the unemployment rate dropped by only 0.1 percent.
Take a closer look at the February, 2011, labor force, employment, and unemployment data to better understand the meaning of the unemployment rate.
The Employment Situation – February 2011
U.S. Bureau of Labor Statistics
March 4, 2011
"Nonfarm payroll employment increased by 192,000 in February, and the unemployment rate was little changed at 8.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in manufacturing, construction, professional and business services, health care, and transportation and warehousing."
"The number of unemployed persons (13.7 million) and the unemployment rate (8.9 percent) changed little in February. The labor force was about unchanged over the month. The jobless rate was down by 0.9 percentage point since November 2010." The BLS also increased the estimate of job gains in January to a gain of 63,000 jobs from the initial estimate of 36,000.
Despite job gains in recent months, the recovery of U.S. jobs lost during the 2007-2009 recession has been slow. Most of the recent recessions have been followed by much faster recoveries. Figure 1, below, shows the monthly national unemployment rates from 1990 to the present. 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
Research Activity:
- Identify the periods of the recessions since 1990?
- What are the common characteristics of the recessions?
-
What are the differences between the recessions?
- Employment Growth?
- Unemployment?
- Real GDP growth?
- How does the 2007 to 2009 recession compare to the other recessions?
Links:
- History of real GDP growth: GDP Growth History
- History of the unemployment rate: Unemployment Rate History
- History of the employment level: Employment Level History
The BLS releases monthly data on employment – the number of people working – and unemployment – the number of people not working and looking for jobs. The February data showed some improvement, but not what is needed to show that the United States economy is healthy again and creating enough jobs to reduce the unemployment rate. The consensus estimate is that the economy must create 150,000-200,000 jobs each month just to keep up with population growth. Take a look at the highlights of the February, 2011, employment and unemployment data.
Household Survey Data - Unemployment
The number of unemployed persons in February, 2011, was13.673 million people, down 190,000 from January. In the past year, the number of unemployed persons has dropped by 1.187 million. The unemployment rate fell slightly to 8.9 percent since January, and has fallen from 9.7 percent since February, 2010.
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Key Labor Force Data February 2011 |
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| Civilian noninstitutionalized population | 238,851,000 | +147,000 |
| Civilian Labor Force | 153,246,000 | +60,000 |
| Civilian Labor Force Participation Rate | 64.2% | No change |
| Employed Persons | 139,573,000 | +250,000 |
| Employment-Population Ratio | 58.4% | No change |
| Unemployed Persons | 13,673,000 | -190,000 |
| Unemployment Rate | 8.9% | -0.1% |
| Persons not in labor force | 85,605,000 | +87,000 |
| Empoyed part time for economic reasons | 8,340,000 | -67,000 |
| Marginally attached to the labor force | 2,730,000 | -70,000 |
| Discouraged workers | 1,020,000 | +27,000 |
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.”
Question: 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?
For background information, see the BLS online publication, “Persons Outside the Labor Force Who Want a Job,” www.bls.gov/opub/mlr/1998/07/art3full.pdf .]
U.S. Unemployment is Not Distributed Equally
Among the major demographic groups, the unemployment rates in February, 2011, and changes from January to February were:
| All adults | 8.9% | -0.1% |
| Adult men | 8.7% | -0.1% |
| Adult women | 8.0% | +0.1% |
| Teenagers | 23.9% | -1.8% |
| Whites | 8.0% | 0% |
| Blacks | 15.3% | -0.4% |
| Hispanics | 11.6% | -0.3% |
| Asians | 6.8% | -0.1% |
Question: Why are there such differences between the demographic groups?
Take a look at the unemployment rates for people with different levels of education in February, 2011. Do you see a pattern?
| Less than a high school diploma | 13.9% |
| High school graduate | 9.5% |
| Some college, no diploma | 7.8% |
| College graduates | 4.3% |
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 4 BLS report added a comment about the industries that grew in February, 2011, “Job gains occurred in manufacturing, construction, professional and business services, health care, and transportation and warehousing." The largest reported job growth in industries in February, 2011, were in construction and manufacturing, both gaining 30,000 jobs. The largest decline by industry group was in government employment, minus 30,000 jobs in February.
Many news writers and analysts noted that the gain in the private sector was encouraging, especially with the gains in manufacturing and construction. See Table B-1 of the March 4, 2011, report for the Establishment Survey details. http://www.bls.gov/news.release/empsit.b.htm
Question: How do you characterize the October employment data?
- What industries are growing?
- What industries are not growing or shrinking?
- Are there patterns?
Regional and State Employment and Unemployment – February 2011
The BLS also collects and releases data on employment and unemployment in the several geographic regions of the United States and metropolitan areas. The most recent news release on state and regional unemployment data was on January 25, 2011. The most recent news release on metropolitan area employment and unemployment data was made on February 2, 2011.
- Metropolitan Areas Employment and Unemployment Summary
- State and Regional Employment and Unemployment Summary
Highlights from the Regional and State News Release:
“Regional and state unemployment rates were generally little changed in December. Twenty states recorded unemployment rate increases, 15 states and the District of Columbia registered rate decreases, and 15 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Thirty-one states and the District of Columbia posted unemployment rate decreases from a year earlier, 16 states reported increases, and 3 states had no change."
The states with the highest unemployment rates in December were Nevada (14.5 percent), California (12.5 percent), Florida (12.0 percent), Michigan (11.7 percent), and Rhode Island (11.5 percent).
The states with the lowest unemployment rates in December were North Dakota (3.8 percent), Nebraska (4.4 percent), South Dakota (4.6 percent), and New Hampshire (5.5 percent).
The West region had the highest regional unemployment rate in December, 10.9 percent, and the Northeast region had the lowest rate, 8.4 percent.
Question: How does your state and region compare to surrounding states?
State Data Links
- Table 1. Civilian labor force and unemployment by census region and division, seasonally adjusted
- Table 2. Civilian labor force and unemployment by census region and division, not seasonally adjusted
- Table 3. Civilian labor force and unemployment by state and selected area, seasonally adjusted
- Table 4. Civilian labor force and unemployment by state and selected area, not seasonally adjusted
- Table 5. Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted
- Table 6. Employees on nonfarm payrolls by state and selected industry sector, not seasonally adjusted
- HTML version of the entire Region and State news release
Highlights from the Metropolitan Area News Release
"Unemployment rates were lower in December than a year earlier in 238 of the 372 metropolitan areas, higher in 115 areas, and unchanged in 19 areas, the U.S. Bureau of Labor Statistics reported today. Fourteen areas recorded jobless rates of at least 15.0 percent, while 14 areas registered rates of less than 5.0 percent. Two hundred metropolitan areas reported over-the-year increases in nonfarm payroll employment, 156 reported decreases, and 16 had no change."
El Centro, California recorded the highest metropolitan area unemployment rate, at 28.3 percent, followed by Yuma, Arizona, awith 23.2 percent. Among the 14 areas with jobless rates of at least 15.0 percent, 12 were located in California.
Lincoln, Nebraska had the lowest metropolitan area unemployment rate in December, 2010, just 3.5 percent. The next two areas with very the low unemployment rates were Bismarck, North Dakota, 3.9 percent, and Fargo, North Dakota-Minnesota, with 4.0 percent. Note: Some metropolitan areas, such as Fargo, extend over state lines.
Many of the largest cities in the United States have higher than average unemployment rates, but many are below the average. Take a look a the list of the twenty largest U.S. cities in Figure 2, below.
Many of the largest cities in the United States have hagher than average unemployment rates, but many are below the average. Take a look a the list of the twenty largest U.S. cities in Figure 2, below. Any surprises?
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The Twenty Largest U.S. Cities Unemployment Rates December 2010 |
||||
| Rank | City | State | Population |
Unemployment Rate |
| 1 | New York | New York | 8,391,881 | 8.6% |
| 2 | Los Angeles | California | 3,831,868 | 11.7% |
| 3 | Chicago | Illinois | 2,851,268 | 8.7% |
| 4 | Houston | Texas | 2,257,926 | 8.3% |
| 5 | Phoenix | Arizona | 1,593,659 | 8.4% |
| 6 | Philadelphia | Pennsylvania | 1,547,297 | 8.4% |
| 7 | San Antonio | Texas | 1,373,668 | 7.3% |
| 8 | San Diego | California | 1,306,300 | 10.1% |
| 9 | Dallas* | Texas | 1,299,542 | 7.9% |
| 10 | San Jose | California | 964,695 | 10.7% |
| 11 | Detroit | Michigan | 910,921 | 11.1% |
| 12 | San Francisco | California | 815,358 | 9.9% |
| 13 | Jacksonville | Florida | 813,518 | 11.0% |
| 14 | Indianapolis | Indiana | 807,584 | 8.4% |
| 15 | Austin | Texas | 786,386 | 6.8% |
| 16 | Columbus | Ohio | 769,332 | 7.8% |
| 17 | Fort Worth* | Texas | 727,577 | 7.9% |
| 18 | Charlotte | North Carolina | 709,441 | 10.7% |
| 19 | Memphis | Tennessee | 676,640 | 9.4% |
| 20 | Boston | Massachussetts | 645,169 | 9.3% |
| *Dallas & Ft. Worth Texas are classified as one metropolitan statistical area. | ||||
Question: If you live in or near a large metropolitan area, how does your city compare to other cities?
Metropolitan Area Data Links
- Table 1. Civilian labor force and unemployment by state and metropolitan area
- Table 2. Civilian labor force and unemployment by state, selected metropolitan area, and metropolitan division(1)
- Table 3. Employees on nonfarm payrolls by state and metropolitan area
- Table 4. Employees on nonfarm payrolls by state, selected metropolitan area, and metropolitan division
- HTML version of the entire Metropolitan Area news release
[Note to Teachers: The BLS report on annual state and regional employment and unemployment data for the year 2010 was released February 25, 2011. http://www.bls.gov/news.release/srgune.nr0.htm More comprehensive 2010 regional and state employment and unemployment data can be found at: http://www.bls.gov/news.release/srgune.t01.htm .]
[Note to Teachers: The BLS also publishes individual "At a Glance" reports for each state and largeer cities in those states. Students may be interested in looking at the data for their local area. http://www.bls.gov/eag/ ]
CONCLUSION
The U.S. economy added 192,000 jobs in February, 2011, but the U.S. unemployment rate remained high, at 8.9 percent - a mixed message. Construction and manufacturing added a total of 60,000 jobs in February, but governments lost 30,000 jobs.
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?"
Growth in construction and manufacturing may be a sign of good things to come, but the financial crises facing local and state governments may continue to slow the recovery. Keep an eye on the employment data reports this spring for further signs of economic growth.
ASSESSMENT ACTIVITY
Next, answer the questions below on the interactive notepad.
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:
- Regional and State Employment and Unemployment Summary
- Metropolitan Area Employment and Unemployment Summary ]
- How does your state compare to the national average and surrounding states?
- Are there regional patterns of unemployment in your area that are higher and lower than the national average?
- Which five states had the highest unemployment rates last reported month? Lowest?
- Did the unemployment rate decrease in any states last reported month?
- Why do you think your region or state differs from other regions or states, or the national employment and unemployment trends?