How the unemployment rate is calculated

October’s jobless rate, pegged at 7.3 percent, was up slightly from September. But the number’s meaning is a source of monthly public confusion. Here are some explanations.

•The arm of government that computes the unemployment rate is the Labor Department’s Bureau of Labor Statistics. This FAQ on the bureau’s site explains how the number is reached and what it means. It starts with the question “Why does the government collect statistics on the unemployed?” When a willing worker is unemployed, everybody loses, it explains. “Workers and their families lose wages, and the country loses the goods or services that could have been produced.” And without income to spend, one job loss can lead to another.

•The opposite of an unemployment rate would be the employment rate — the percentage of available workers who actually have jobs. At Economics, Jodi Beggs explains the obvious, but seldom, referenced figure. An unemployment rate of 7.3 percent means 92.7 percent of the workforce has a job, though many in that group may be working part time, or at jobs that are poorly paid, or for which they are overqualified. All those are called the underemployed.

•If you are underemployed, what to do? Jay MacDonald, at, says it is possible in some cases to collect unemployment benefits when your job is cut way back. “The bad news is, too much part-time work could cost you your underemployment benefits,” MacDonald writes.

•Alternative unemployment rates abound — compiled by independent and governmental groups. The Bureau of Labor Statistics’ own monthly page of “alternative measures” offers a selection of rates going as high as 13.8 percent for October. That number represents a seasonally adjusted rate for the total of the typically counted unemployed, “plus all persons marginally attached to the labor force, plus total employed part-time for economic reasons.” That 13.8 percent figure was down from 14.5 percent in October 2012.

•Interesting, and much-criticized, alternative numbers come from, by Walter J. “John” Williams, who contends government numbers are manipulated for political reasons. You be the judge.

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