Each month, the U.S. Labor Department’s Bureau of Labor Statistics announces the number of employed and unemployed people in the United States for the previous month, along with details such as their ages, race and ethnic backgrounds, education levels, occupations and so forth.
The department’s Bureau of Labor Statistics has reported such data since 1940 and openly shares its methodologies.
Both the International Labour Organization (ILO), a U.N. agency that sets standards, and the Organisation for Economic Co-operation and Development (OECD), with 36 member countries, cite the importance of reporting unemployment rates regularly, transparently and nonpolitically. The United States is a member of both organizations.
Timely labor statistics help policymakers to “design, implement and evaluate evidence-based policies” to stimulate economic growth, said Steven Kapsos, an ILO economist.
The ILO collects labor-force survey data from national statistical offices around the world. “Sound surveys [are] essential not only for policymakers, but also for firms and job seekers so that they can make informed decisions — whether related to hiring, compensation, what types of skills are in demand now and in the future,” Kapsos said.
OECD member countries agree on what data gets collected and how often, according to Paul Schreyer, the OECD’s acting chief statistician. “Shared knowledge, evidence and transparency on methods helps with formulating government policies and informing society.”
“Without the data, all you have is an opinion.”
— American engineer W. Edwards Deming
Sharon Brown-Hruska, chief economist at the U.S. Department of State, cites the People’s Republic of China as a country whose economic data, including unemployment figures, are unreliable.
“The PRC has made a science out of fudging their GDP, unemployment, and economic numbers. Their control over economic statistics and uniquely communist (i.e., central planning) practices give economists trying to gauge performance much consternation,” she said.
“Specifically, the PRC government sets growth targets that the provincial authorities must meet for GDP and employment,” Brown-Hruska said. These authorities “engage in inefficient investment while undercounting significant segments of the population, such as rural and provincial migrant workers,” to meet the targets.
The system denies unemployment benefits to some Chinese and hampers economists’ efforts to compare unemployment rates across countries.
Snapshot of the economy
The U.S. uses the monthly reports to shape policies. The information not only tells officials how many people are unemployed, but also how they lost their jobs, how long ago, and their sex and age. The data shows salary ranges for the employed and which sectors of the economy are suffering and which are hiring.
The national unemployment rate — expressed as the number of unemployed people as a percentage of the total labor force — is perhaps the most widely known labor-market indicator among U.S. citizens.
