The Labor Force and the Unemployment Rate

In the United States, the CPS, or the Household Survey, is conducted, and data is collected from the civilian noninstitutional population aged 16 and older through both in-person and telephone interviews.

Although the CPS collects responses from about 60,000 households, the sample is carefully designed to reflect the broader U.S. population.

The Bureau of Labor Statistics uses these survey responses to estimate national figures for individuals classified as employed, unemployed, or not in the labor force.

Then, statistics such as the labor force, the unemployment rate, and the labor force participation rate are calculated.

The labor force is the sum of the employed and the unemployed.

Next, the unemployment rate is calculated as the quotient of the unemployed people and the total labor force multiplied by 100.

Another statistic is the labor force participation rate, which is calculated as the quotient of the number of people in the labor force and the civilian noninstitutional population aged 16 and older, multiplied by 100.

Economists and policymakers closely monitor these statistics.