Frequently Asked Questions (FAQs)
Yes and no. There are six unemployment rates calculated, and each one includes different types of workers. The unemployment rate that receives the most attention in the media and is published monthly by the BLS and the Ohio Bureau of Labor Market Information is called the U-3, or the "headline" rate. The U-3 is equal to the number of unemployed workers divided by those in the "labor force," or those who are employed or currently looking for work. If a worker is "discouraged" and stops looking for work, they are not included in this headline unemployment rate. However, the five other unemployment rates have different definitions of the labor force, and three of the six rates include discouraged workers. For example, the U-4 includes discouraged workers, along with those currently seeking employment and those working, in the labor force. The U-5 adds marginally-attached workers, while the U-6 adds in part-time workers. So why is the U-3, or the headline rate (because it's in the headlines) the only rate published in newspapers? First, while the U-3 is available monthly for Ohio, the other rates are only available quarterly. Second, the other rates track very closely with the U-3. When the U-3 unemployment rate moves up, so do the other rates. Therefore, additional rates become rather confusing and repetitive. Third, the U-3 is the unemployment rate that has been produced for the longest amount of time. In order to compare today's unemployment rates with those in the 1970's, the U-3 must be used.
Seasonal adjustment is a statistical technique that attempts to measure and remove the influences of predictable seasonal patterns to reveal how employment and unemployment change from month to month. Over the course of a year, the size of the labor force, the levels of employment and unemployment, and other measures of labor market activity undergo fluctuations due to seasonal events including changes in weather, harvests, major holidays, and school schedules. Because these seasonal events follow a more or less regular pattern each year, their influence on statistical trends can be eliminated by seasonally adjusting the statistics from month to month. These seasonal adjustments make it easier to observe the cyclical, underlying trend, and other nonseasonal movements in the series. As a general rule, the monthly employment and unemployment numbers reported in the news are seasonally adjusted data. Seasonally adjusted data are useful when comparing several months of data. Annual average estimates are calculated from the not seasonally adjusted data series.
Every year, the Ohio Bureau of Labor Market Information produces an updated set of short-term and long-term employment projections to provide an estimate of future industry and occupation growth. The short-term projections span two years, while long term projections forecast ten years into the future. To create the forecast, LMI researchers forecast industry growth in Ohio and use expected occupational mix to estimate future occupational demand. The forecasts serve as estimates of future demand and are not anticipated to be exactly correct. Instead, the relative size of forecasts should be used to measure relative demand, with larger growth implying larger demand, and vice versa.
The Current Employment Statistics (CES) program provides a monthly count of persons on nonfarm establishments payrolls (including employees on paid sick leave, paid holiday, or paid vacation) who work or receive pay for any part of the week that includes the 12th of the month. It is a count of jobs by place of work, not people. Individuals could be counted multiple times if they hold more than one job. Self-employed, unpaid volunteer or family workers, domestic workers in households, military personnel, and persons who are laid off, on leave without pay, or even on strike for the entire reference period are not included in the data.
The Local Area Unemployment Statistics (LAUS) program provides a monthly estimate of an area's labor force, employment, unemployment, and unemployment rate. Data is taken from surveys and unemployment claims recorded during the monthly reference week, which is usually the week including the 12th day of each month. Statistics are an estimate of persons by place of residence, not jobs or where a person works. In order to be considered unemployed an individual must have had no employment during the reference week, been available for work, and have made an effort to find employment for four weeks leading up to the reference week.
The Occupational Employment and Wage Statistics (OEWS) program was formerly known as the Occupational Employment Statistics (OES) program.
The Occupational Employment Statistics (OEWS) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas; national occupational estimates for specific industries are also available.
The OEWS survey is a semi-annual survey for all full-time and part-time wage and salary workers in nonfarm industries covered by unemployment insurance. Survey materials are sent to business establishments to collect data for the payroll period including the 12th of May or November. The survey does not cover the self-employed, owners and partners in unincorporated firms, household workers, or unpaid family workers.
Industry employment and wage data is collected through the Quarterly Census of Employment and Wages (QCEW) program. The primary source for the QCEW are the reports submitted by employers to the Ohio Unemployment Insurance program. Employment data represents the number of workers on the payroll during the pay period including the 12th day of the month. Total wages include gross wages and salaries, bonuses, profit sharing, commissions, severance pay, and limited tips. Total wages are reported in quarter paid and not earned.
Metropolitan and Micropolitan Statistical Areas (MSAs) are official urban regions designated by the federal government and used by statistical agencies. A metropolitan area has an urban core with a population of at least 50,000 people, while a micropolitan area has a population between 10,000 and 50,000 people. MSAs refer to the core urban area, plus the counties containing the core urban area and any adjacent counties that have a high level of social and economic integration with the urban core. In Ohio, there are currently fourteen metropolitan areas: Akron, Canton-Massillon, Cincinnati, Cleveland-Elyria, Columbus, Dayton, Huntington-Ashland*, Lima, Mansfield, Springfield, Toledo, Weirton-Steubenville, Wheeling*, and Youngstown-Warren-Boardman. These areas are updated periodically, and may be revised with changes in Ohio’s population.
*Data on West Virginia MSAs including Ohio counties may be viewed at http://lmi.workforcewv.org/.
Ohio labor market statistics are published monthly at the same time as all other states. The data are published for the prior month, so that July's estimates are released in August. Generally, the unemployment rate is released on a Friday during the third week of the month, although the schedule changes in some months due to the national release schedule. February's release, which includes labor statistics for the month of January, is delayed until March. In July, September, and November, the data are released on a Tuesday. The full release schedule can be found on the Bureau of Labor Statistics website at http://www.bls.gov/schedule/news_release.
There is no difference between the statistics. The Bureau of Labor Statistics (BLS) contracts with the Ohio Department of Job and Family Services (ODJFS) to collect and produce labor market statistics for our state. The Ohio Bureau of Labor Market Information (Ohio LMI), part of ODJFS, collects, produces, and disseminates the labor market information. The BLS provides the models and methodology that are used to generate the numbers, and the state must use the standard methodology.
The Ohio unemployment rate is published at the 90 percent confidence interval with an error range of plus or minus 0.5 percentage points. Given that the reported changes to the unemployment rate are often only 0.1 or 0.2 percentage points, this is a fairly large error range. Unemployment statistics are designed primarily to track changes in the economy, rather than being precise on the level of unemployment. In other words, the statistical model used to calculate the unemployment rate is designed to determine whether unemployment is increasing or decreasing, but it is less accurate in whether the change is large or small. For these reasons, it is important to view the unemployment rate as a part of an historic trend.
Yes. The Ohio unemployment rate estimate considers all unemployed people when generating the rate, not just those receiving unemployment insurance (UI) benefits. Not everyone who loses a job applies for UI benefits, and not everyone qualifies even after applying. For example, independent contractors and the self-employed don't pay into the UI system, and therefore do not qualify for benefits. In fact, only about a third of Ohio's unemployed workers receive UI benefits. But the number of UI claims increase when unemployment increases, so the number of claims remains a good indicator of what is going on in the Ohio economy. To account for people who lose their jobs but don't file UI claims, the Bureau of Labor Statistics and the Ohio Bureau of Labor Market Information consider other information when calculating the unemployment rate. The unemployment rate is calculated from a statistical model that combines data from three different sources. One of these sources is the number of claims for that month, which increases when overall unemployment increases. The second source is a survey of businesses called the Current Employment Statistics, which tracks hiring, firing, and employment in Ohio businesses. The third source is the Current Population Survey (CPS), which is a national survey that calls American households and asks them about their employment status. Although it sounds complicated, the unemployment rates generated do a pretty good job of tracking the number of people in Ohio that can't find work. The unemployment rates are checked against other data sources annually to make sure the model remains accurate. Surveying a greater number of Ohio households or other changes to the methodology would likely increase the accuracy of the unemployment rate, but these improvements would come with greater cost.
