A. The Bureau of Labor Statistics (
BLS) measures unemployment through household surveys. The BLS also reports on the number of discouraged workers, who have given up looking for work and are no longer counted among the unemployed although they are not working. If this number is increasing while the
unemployment rate is remaining stable, it could mean a
recession is looming despite a low unemployment rate.
The most closely watched statistic is the unemployment rate, which is the number of unemployed people divided by the number of employed people. A tenth of a percentage point difference from last month's rate, or even from the economists' expected rate, can affect the stock market. The important comparison to make, however, is this month's unemployment rate compared to the same time last year. Although a few tenths of a point from one month to the next could be caused by many factors and is too small to establish a trend. However, if the unemployment rate consistently increases over last year's rate, then you know an economic slow-down is underway.
Employment FAQ
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