The Unemployment Survey

The unemployment rate is one of the nation’s most important measures of economic health. Some people think that the unemployment rate is measured by counting the number of persons who claim unemployment compensation under state or federal government programs. However, many persons are unemployed, yet are not eligible for unemployment compensation, or their unemployment compensation has run out. Therefore, the unemployment rate is published based on a government survey, called the Current Population Survey.

There are approximately 60,000 representative American households in the sample for this survey. The survey sample may not seem very large, but government statisticians consider the survey a reliable indicator of unemployment in the United States.

The Accuracy of the Unemployment Rate

According to the official definition, a person is considered unemployed if (s)he is without a job, is currently available to work, and has actively looked for work in the prior four weeks.

Hidden unemployment exists when someone is out of work, wants a job, but has given up looking because (s)he has become discouraged. A person who has lost her/his job, but is not looking for another one, is not counted in the unemployment statistics. This makes some people question the accuracy of the unemployment rate. Some economists have questioned the accuracy of the unemployment rate for other reasons.

Underemployment exists when a person accepts a job (s)he does not really want or for which (s)he is overqualified. Should someone with a law degree who can only find a job as a clerk be counted as unemployed or underemployed? Should a person who wants to work full-time but can only find something part-time be counted as partially unemployed? According to the current definition, these workers are counted as fully employed. On the other hand, there are people who claim to be unemployed, but are in actuality employed in the underground economy. These include people working illegally (drugs, prostitution), and those who do productive work, but do not report this income (for example, a handy person who fixes a friend’s basement).

For more information about how the government determines the number of persons employed and unemployed in our economy, click HERE.

Unemployment in the United States

Below is a table with United States unemployment data from 1933 until 2016. The percentages are all taken from the June rate of each year, unless otherwise noted. As you can see, unemployment was high during the 1930s and early 1940s. A few years later, it reached an all-time low, during the height of World War II, primarily due to the military mobilization of a large part of the United States labor force. During the late 1950s and early 1960s, the rate increased again. The late 1960s were relatively healthy economic times. Then in the 1970s, the economy experienced “stagflation,” which means that our economy suffered from increasing unemployment (stagnation) and increasing inflation. This culminated in post-World War II record unemployment rates in the double digits in the early 1980s. At this point, the Federal Reserve changed its monetary policy, committed to lower inflation, and improved the economy. From the early 1980s through 2007, the inflation rate has been relatively low, and subsequently, the unemployment rate was reasonably low during this period.

The recession that began in 2008 caused the unemployment rate to rise significantly through 2009. Recently it has decreased to 4.6% (November, 2016).

Year (June Number) U.S. Unemployment Rate Year (June data, unless otherwise noted) U.S. Unemployment
Rate
1933 24.9 1971 5.9
1934 21.7 1972 5.7
1935 20.1 1973 4.9
1936 16.9 1974 5.4
1937 14.3 1975 8.8
1938 19.0 1976 7.6
1939 17.2 1977 7.2
1940 14.6 1978 5.9
1941 9.9 1979 5.7
1942 4.7 1980 7.6
1943 1.9 1981 7.5
1944 1.2 1982 9.6
1945 1.9 1983 10.1
1946 3.9 1984 7.2
1947 3.9 1985 7.4
1948 3.6 1986 7.2
1949 6.2 1987 6.2
1950 5.4 1988 5.4
1951 3.2 1989 5.3
1952 3.0 1990 5.2
1953 2.5 1991 6.9
1954 5.6 1992 7.8
1955 4.2 1993 7.0
1956 4.3 1994 6.1
1957 4.3 1995 5.6
1958 7.3 1996 5.3
1959 5.0 1997 5.0
1960 5.4 1998 4.5
1961 6.9 1999 4.3
1962 5.5 2000 4.0
1963 5.6 2001 4.5
1964 5.2 2002 5.8
1965 4.6 2003 6.3
1966 3.8 2004 5.6
1967 3.9 2005 5.0
1968 3.7 2006 4.6
1969 3.5 2007 4.6
1970 4.9 2008 5.6
2009 9.5
2010 9.4
2011 9.0
2012 8.2
2013 7.5
2014 6.1
2015 5.5
2016 (Nov.) 4.6

Source: U.S. Department of Labor, Bureau of Labor Statistics, 2016.

Unemployment Rates around the World

The table below shows unemployment rates of selected countries around the world. Note that some less-developed countries do not keep accurate statistics, and some countries use a different definition to measure unemployment. Thus, comparisons can be difficult.

Country/Area Unemployment Rate (2007, unless otherwise indicated) Unemployment Rate (2008, unless otherwise indicated) Unemployment Rate (2009-2011) Unemployment Rate (2015, unless otherwise indicated)
United States 5.6 7.2 9.2 4.6 (2016)
Afghanistan 40.0 35.0 NA NA
Brazil 9.8 8.0 6.5 9.0
Canada 5.9 6.1 7.4 6.9
China 4.0 4.0 4.1 4.0
Cuba 1.9 1.8 1.6 2.4
European Union 8.5 7.5 9.3 9.5
Germany 4.2 4.4 5.1 4.6
Hong Kong 4.2 4.1 4.0 3.3
India 7.2 6.8 9.4 8.4
Japan 4.0 4.2 4.9 3.4
Netherlands 4.1 4.5 5.4 6.9
Qatar 0.7 0.5 0.5 0.4
Russia 5.9 plus underemployment 6.2 7.6 5.6
Zimbabwe NA 80.0 95.0 NA

Source: CIA World Fact Book, 2016. For a complete listing of unemployment rates around the world, visit https://www.cia.gov/index.html.