1 1 (July 13, 2020)

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COVID-19: Measuring Unemployment



July 13,2020
Due to the effects of the Coronavirus Dis ease 2019 (COVID- 19) pandemic, unemployment has risen to
levels unseen since the Great Depression, peaking at a rate of 14.7% in April before decreasing to 11.1%
in June. The unemployment rate is seen as a crucial metric for judging policy outcomes, but confusion
among many observers about how the unemployment rate is calculated has been exacerbated by COVID-
19 and the difficulties it has presented. This Insight discusses how unemployment data are collected and
classified, delves into the challenges COVI D-19 has introduced, and puts these issues into context with a
brief look at recent unemployment trends.


Unemployment Rate Methodology


How Are Unemployment Data Collected?

Unemployment data are released every month by the U.S. Bureau of Labor Statistics (BLS). The BLS
calculates unemployment rates based on data provided by the Current Population Survey (CPS), a
monthly survey conducted by the UT S. Census Bureau. Each month, the CPS is given to a representative
sample of about 60,000 households, which covers about 110,000 individuals. Agiven household is
included in the sample eight times. Survey responses are collected in person or over the phone, with the
initial survey typically collected in person.

Who Counts as Unemployed?
The CPS poses a series of questions to determine the employment status of individuals. Individuals are
categorized as employed if they did any work (including part-time or temporary work) for pay or profit
during the survey reference week. In general, individuals are categorized as unemployed if they do not
have ajob at the time of interview, have actively looked for ajob in the four weeks preceding the
interview, and are currently available to work. Arespondent who was laid off part way through the survey
reference week is considered employed because they worked for part of the reference week. If an
individual does not have a job and either has not looked for work in the previous four weeks or is not
currently available for work or both, then that individual is not considered part of the labor force.



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