Where Does the Unemployment Rate Come From?

One of the most looked at and talked about economic indicators is the Unemployment Rate. Generally speaking, an economy with a low unemployment rate is considered to be in good shape. An economy with a higher unemployment rate is considered to need improvement. 

In May and June 2019 the unemployment rate in Texas was 3.4 percent, a record low going back to 1976. That’s good! In April 2020, largely due to COVID-19 and measures taken to slow its spread, the unemployment rate spiked to 12.9 percent. Record high. Not good. In March 2021, the rate was still elevated at 6.9 percent, but clearly improving. 

But what are we talking about here? Where does this number come from? How is the Texas unemployment rate calculated? What information is the unemployment rate based on? 

3 Things that Make Up the Unemployment Rate 

1. Unemployed population (UNEMP): Texans who are currently looking for employment 

2. Employed population (EMP): Texans who are currently employed 

3. Civilian Labor Force (CLF): The total sum of the Unemployed and Employed populations 

How We Calculate Unemployment Rate: 

There are two steps to calculate Texas’ unemployment rate, using the above information: 

1. Civilian Labor Force = Unemployed Population + Employed Population 

2. (Unemployed Population ÷ Civilian Labor Force) x 100* = Unemployment Rate 

The Unemployment Rate changes each month, as more people enter the workforce, leave the workforce, become unemployed, or become employed.  

Who makes up Texas’ Employed Population? 

Texas’ Employed Population (EMP) contains people who are:  

• currently employed 
• at least 16 years old 
• not on active duty 
• not in a nursing home or a prison or otherwise institutionalized 

Who makes up Texas’ Unemployed Population?  

Texas’ Unemployed Population (UNEMP) contains people who are:  

• currently seeking employment 
• at least 16 years old 
• not on active duty 
• not in a nursing home or a prison or otherwise institutionalized 

How We Determine Who Is Included in the Unemployment Rate 

Simply put, the unemployment rate only contains people who fit into the Civilian Labor Force (CLF): 

• People over 16 who are 
• Employed or 
• Actively seeking employment 

Does the Civilian Labor Force (CLF) Equal Every Texan? Does the Unemployment Rate Include Every Texan? 

No. The CLF is Not Everybody. Therefore, the unemployment rate does not include every Texan because the unemployment rate can only be calculated from people who are employed or actively looking for employment. 

It’s not your retired war veteran uncle who lives in Ft Lauderdale.  

It’s not your 10-year-old daughter who just got braces and wants to be an astronaut.  

And if you (yes, you) are enjoying some time off right now before you jump back into the job market, then it’s not you, either.  

Everyone in the CLF right now either has a job or wants one badly enough to look, right now.  

Show Me the Data – Where do the numbers really come from? 

But how do we determine how many people are in the CLF? And how do we determine how many of those are EMP and how many are UNEMP?  

The U.S. Government has two principle ways of gathering information about large populations of people:  

1. The Census 

2. Surveys.  

A survey involves getting information from a few people in a population and using probabilities to allow their responses to represent what is likely the case for the rest of the population.  

A good example is the U.S. Government’s Current Population Survey (CPS), which is conducted every month by the U.S. Census Bureau on behalf of the U.S. Bureau of Labor Statistics (BLS). This is the main source used for calculating the unemployment rate. The CPS covers a multitude of topics, including the respondent’s relationship to the labor force. About 60,000 households nationwide receive the CPS every month. 

The labor force-related section of the CPS is 45 pages long and consists of more than 200 questions. That might seem overwhelming but sophisticated skip patterns use the responses to several questions to ensure respondents are asked only a small set of questions about themselves. Averaged over eight months of interviews, the labor force section of the CPS interview lasts about six minutes per person.  

Want to see what that labor force section of the CPS looks like? Check it out here. 

Based on the answers provided to the labor force questions in the CPS, data collectors can determine 1) whether a person is a part of the CLF, and 2) whether they should be classified as EMP or UNEMP. The numbers that result from the CPS, including CLF, EMP, UNEMP, and URATE, are estimates. Like many estimates that come from surveys, they are subject to revision.  

What does this mean for me? 

First, it means that when you look at the URATE released every month by the Texas Workforce Commission or another state workforce agency or BLS, you can be confident that it is based on real information gathered from real people across Texas and across the country.  

Second, it means that if you ever receive a Current Population Survey from BLS, and you well may, then you would be doing yourself and your state and nation a great service by providing the information requested. It takes mere minutes, is completely confidential, and it does make a difference. 

For more information, visit the Local Area Unemployment Statistics Home Page (bls.gov). 

Takeaways 

As you can see, the unemployment rate is a valuable number that tells a specific story when it is released each month. It is not just a percentage of the population that is not working. It is a percentage of the 16-and-over population that, had they their druthers, would have a job right now, but unfortunately does not. 

* Multiplying by 100 is necessary to convert the decimal number to a percentage. 

Texas’ Unemployment Rate in November Remains at Historic Low 3.7%

Texas’ seasonally adjusted unemployment was 3.7 percent in November, remaining at the same historic 42-year low it was in October. The Texas economy added 14,000 seasonally adjusted nonfarm jobs in November. Annual employment growth for Texas was 3.0 percent in November, marking 103 consecutive months of annual growth.

“The addition of 365,400 jobs over the year and 14,000 jobs in November demonstrates the consistency with which employers in our state create job opportunities for the highly skilled Texas workforce,” said TWC Chair Ruth R. Hughs. “The Texas economy offers employers access to a competitive workforce and provides job seekers with career options in a variety of growing Texas industries. The numbers are a testament to the resilience of our Texas employers and the diversity of our Texas economy.”

The Manufacturing Industry recorded the largest private-industry employment gain over the month with 9,100 jobs added and led all industries in growth.

In Texas’ private Service Providing sector, Trade, Transportation, and Utilities added 8,900 positions in November. Also within this sector, Professional and Business Services added 1,800 followed by Information, which added 1,000 positions.

“Employment demand continues to be high in well-paying industries such as Manufacturing, Construction, and Mining and Logging,” said TWC Commissioner Representing Labor Julian Alvarez. “I encourage career exploration in these and other industries that are growing in Texas. TWC’s labor market information tools and products are designed to inform, prepare and advance our Texas workforce. Visit a Workforce Solutions Office to find out more about the latest employment opportunities available.”

The Midland Metropolitan Statistical Area (MSA) recorded the month’s lowest unemployment rate among Texas MSAs with a non-seasonally adjusted rate of 2.1 percent, followed by the Amarillo MSA which had the second lowest with a rate of 2.5 percent. The Odessa MSA recorded the third lowest rate of 2.6 percent.

“We have much to be proud of in Texas as we enter the holidays celebrating another month of record-low unemployment and sustained job growth,” said TWC Commissioner Representing the Public Robert D. Thomas. “While we reflect thankfully on the contributions from employers and individuals who made this tremendous record of success possible, we remain steadfastly committed to fostering continued job creation through economic development strategies and collaborative efforts to provide opportunities for all Texans to enjoy self-sufficiency and prosperity.”

Employment estimates released by TWC are produced in cooperation with the U.S. Department of Labor’s Bureau of Labor Statistics. All estimates are subject to revision. To access this and more employment data, visit tracer2.com.

To see the full November Texas Labor Market release, please visit the TWC website.

Follow us on Facebook, LinkedIn and Twitter for more updates about Texas Labor Market Data.

Texas’ Unemployment Rate Hits Historic Low 3.7%

Texas’ seasonally adjusted unemployment rate fell to 3.7 percent in October, down from 3.8 percent in September 2018, reaching its lowest level since the state unemployment data series began in January 1976. The Texas economy added 32,300 seasonally adjusted nonfarm jobs in October. Annual employment growth for Texas was 3.1 percent in October, marking 102 consecutive months of annual growth.

“The Texas economy continues to remain strong by adding 32,300 jobs in the month of October. These numbers highlight the strategic job creation efforts of our Texas employers, and provides our world-class workforce with career options in a variety of growing industries,” said TWC Chair and Commissioner Representing Employers Ruth R. Hughs. “Texas is a state that always welcomes new employers and also supports our homegrown businesses, offering them the tools they need to succeed and build on our continued success as a global economic leader.”

October’s annual growth in the state’s Goods Producing industries was strong at 6.6 percent. Over the month, Mining and Logging added 4,300 jobs, followed by the Construction industry with 1,500 positions.

In Texas’ Service Providing sector, Trade, Transportation, and Utilities added 8,900 positions over the month, and led all industries in job growth for October. Also within this sector, Leisure and Hospitality added 8,700 jobs, followed by Education and Health Services which added 5,100.

“Texas’ labor force is made up of hard-working individuals who are eager to obtain the skills that our employers need,” said TWC Commissioner Representing Labor Julian Alvarez. “The jobs are out there, and I encourage all job seekers to contact their local Workforce Solutions office for assistance with job training and placement.”

The Midland Metropolitan Statistical Area (MSA) recorded the month’s lowest unemployment rate among Texas MSAs with a non-seasonally adjusted rate of 2.1 percent, followed by the Amarillo MSA and the Odessa MSA which had the second lowest with a rate of 2.5 percent. The Austin-Round Rock, College Station- Bryan and Lubbock MSAs recorded the third lowest rate of 2.7 percent for October.

“Texas’ dynamic marketplace has set the standard as the Best State for Business over 14 consecutive years according to CEOs,” said TWC Commissioner Representing the Public Robert D. Thomas. “That track record of accomplishment recognizes the perseverance, resilience and hard work of our workforce, employers and collaborative partners across the state.”

Employment estimates released by TWC are produced in cooperation with the U.S. Department of Labor’s Bureau of Labor Statistics. All estimates are subject to revision. To access this and more employment data, visit tracer2.com.

To see the full October Texas Labor Market release, please visit the TWC website.

Follow us on Facebook, LinkedIn and Twitter for more updates about Texas Labor Market Data.

Texas’ Unemployment Rate Falls to New Record Low 3.8%

Texas’ seasonally adjusted unemployment rate fell to 3.8 percent, down from 3.9 percent in August 2018 and setting a new record for the lowest unemployment rate recorded in four decades. The Texas economy added 15,600 seasonally adjusted nonfarm jobs in September. Annual employment growth for Texas was 3.3 percent in September, marking 27 consecutive months of annual growth.

“Texas employers continue to contribute to our state’s success with private-sector employers adding 16,700 jobs in September and accounting for an impressive 402,500 jobs over the year,” said Texas Workforce Commission (TWC) Chair Ruth Ruggero Hughs. “Texas’ continued addition of jobs over a 27-month period demonstrates the competitive advantage and market opportunities available to our Texas employers and world-class workforce.”

September’s annual growth in the state’s Goods Producing industries was strong at 6.9 percent. Over the month, Construction added 3,000 jobs, followed by the Manufacturing industry with 2,800 positions, while Mining and Logging employment expanded by 2,600 positions.

In Texas’ Service Providing sector, Financial Activities added 5,800 positions over the month, and led all industries in job growth for September. Also within this sector, Professional and Business Services added 2,500 jobs, followed by Trade, Transportation, and Utilities which added 2,100.

“Texas’ labor force is made up of hard-working individuals who are eager to obtain the skills that our employers need,” said TWC Commissioner Representing Labor Julian Alvarez. “I encourage all job seekers to contact their local Workforce Solutions office for assistance with job training and placement.”

View the Texas Labor Market Highlights for September 2018 from TWC Labor Commissioner Julian Alvarez:

The Midland Metropolitan Statistical Area (MSA) recorded the month’s lowest unemployment rate among Texas MSAs with a non-seasonally adjusted rate of 2.2 percent, followed by the Amarillo MSA and the Odessa MSA which had the second lowest with a rate of 2.7 percent. The Austin-Round Rock and College Station- Bryan MSAs recorded the third lowest rate of 2.9 percent for September.

“Texas continues to flourish thanks to the outstanding efforts and talents of individuals and employers in communities around the state,” said TWC Commissioner Representing the Public Robert D. Thomas.  “TWC will continue to promote innovative workforce and economic development strategies in collaboration with our education partners, local leaders, and industry to preserve our competitive edge in the best place to work in the world.”

Employment estimates released by TWC are produced in cooperation with the U.S. Department of Labor’s Bureau of Labor Statistics. All estimates are subject to revision. To access this and more employment data, visit tracer2.com.

To see the full September Texas Labor Market release, please visit the TWC website.

Follow us on Facebook, LinkedIn and Twitter for more updates about Texas Labor Market Data.

Texas Economy Adds 23,500 Positions in July

The Texas economy added 23,500 seasonally adjusted nonfarm jobs in July, which marked 25 consecutive months of employment growth. Over the year, Texas added 377,100 jobs for an annual employment growth rate of 3.1 percent.

“Private-sector employers continue to boost the Texas economy adding another 25,900 jobs in July and 372,700 jobs over the year, said Texas Workforce Commission (TWC) Chair Ruth Ruggero Hughs. “Thanks to the innovation and expansion by employers in a wide range of industries, Texans continue to be offered more opportunities to demonstrate their first-class skills and start a career in the nation’s #1 state for business.”

July’s annual growth in the state’s Goods Producing industries was strong at 6.2 percent. Over the month, Construction led all major industries, adding 10,500 jobs.

In Texas’ Service Providing sector, Trade, Transportation and Utilities added 7,500 positions over the month.  Also within this sector, Education and Health Services added 6,400 jobs, followed by Leisure and Hospitality with a gain of 5,700 positions.

“The Texas labor force continues to provide employers with the skills and expertise needed to keep the Texas economy growing,” said TWC Commissioner Representing Labor Julian Alvarez. “TWC is continually committed to developing innovative workforce programs and supporting Texas businesses with a skilled talent pipeline that is unmatched throughout the nation.”

View the July 2018 Texas Labor Market Highlights from TWC Labor Commissioner Julian Alvarez:

The Midland Metropolitan Statistical Area (MSA) recorded the month’s lowest unemployment rate among Texas MSAs with a not seasonally adjusted rate of 2.2 percent, followed by the Amarillo and Odessa MSAs with a rate of 2.9 percent, each. The Austin-Round Rock MSA recorded the fourth lowest rate of 3.1 percent for July.

Employment estimates released by TWC are produced in cooperation with the U.S. Department of Labor’s Bureau of Labor Statistics. All estimates are subject to revision. To access this and more employment data, visit tracer2.com.

To see the full July Texas Labor Market release, please visit the TWC website.

Follow us on Facebook, LinkedIn and Twitter for more updates about Texas Labor Market Data.

Texas Economy Adds 27,200 Positions in June

The Texas economy added 27,200 seasonally adjusted nonfarm jobs in June, which marked 24 consecutive months of employment growth. Over the year, Texas added 359,500 jobs for an annual employment growth rate of 2.9 percent.

“Recognition of Texas as the premier place to do business in the country is reinforced by employers adding another 27,200 jobs in June and an impressive 359,500 jobs over the year,” said TWC Chairman Andres Alcantar. “Broad-based growth across our industries remains solid with ten of eleven industries adding jobs in the dynamic and prolific job creating Texas economy.”

June’s annual growth in the state’s Goods Producing industries was strong at 5.8 percent. Over the month, Mining and Logging added 4,900 jobs, followed by the Construction industry with 2,900 positions, while Manufacturing employment expanded by 2,600 positions.

In Texas’ Service Providing sector, Professional and Business added 7,300 positions over the month, and led all industries in job growth for June.  Also within this sector, Education and Health Services added 6,000 jobs, followed by Leisure and Hospitality with a gain of 3,500 positions.

“Private-sector employment remained strong with Texas employers adding 351,700 jobs over the year and 26,400 jobs added in June,” said TWC Commissioner Representing Employer Ruth Ruggero Hughs. “TWC is committed to developing innovative workforce programs and supporting Texas businesses with a skilled talent pipeline that is unmatched throughout the nation.”

View the Texas Labor Market highlights from Commissioner Ruth R. Hughs:

Midland Metropolitan Statistical Area (MSA) recorded the month’s lowest unemployment rate among Texas MSAs with a non-seasonally adjusted rate of 2.4 percent, followed by the Amarillo MSA, which had the second lowest with a rate of 3.1 percent. The Austin-Round Rock, and Odessa MSAs recorded the third lowest rate of 3.2 percent for June.

“All Goods Producing industries showed positive employment growth in Texas, including Construction, which expanded by 2,900 jobs in June,” said TWC Commissioner Representing Labor Julian Alvarez. “The Texas labor force has continued to provide employers with the skills and expertise needed to keep the Texas economy growing.”

Employment estimates released by TWC are produced in cooperation with the U.S. Department of Labor’s Bureau of Labor Statistics. All estimates are subject to revision. To access this and more employment data, visit tracer2.com.

Follow us on Facebook, LinkedIn and Twitter for more updates about Texas Labor Market Data.

Texas Economy Celebrates 22 Consecutive Months of Employment Growth

The Texas economy added 39,600 seasonally adjusted nonfarm jobs in April, which marked 22 consecutive months of employment growth. In addition, Texas added 332,300 jobs for an annual employment growth rate of 2.7 percent in April.

“Texas employers continue to boost the impressive Texas economy by adding 39,600 jobs in April and 332,300 jobs over the year,” said TWC Chairman Andres Alcantar. “Our state’s ongoing trajectory of success is linked to the innovation and competitiveness of employers in a range of industries providing workers more opportunities to demonstrate their world-class skills.”

Texas’ seasonally adjusted unemployment rate was 4.1 percent in April, up slightly from 4.0 percent in March.

“Texas employers added 327,500 jobs over the past year, making our state’s annual private-sector employment growth 3.2 percent for April, up from 2.9 percent in March,” said TWC Commissioner Representing Employers Ruth R. Hughs. “It’s no surprise that CEOs ranked the Lone Star State as the Best State for Business for the 14^th consecutive year in a row. These numbers are a testament to the perseverance and resilience of our Texas employers and the diversity of our Texas economy.”

The Manufacturing Industry recorded the largest private-industry employment gain over the month with 8,600 jobs added. Professional and Business Services employment grew by 7,500 jobs in April, followed by Education and Health Services with 6,200 jobs.

View the Texas Labor Market highlights from Commissioner Ruth R. Hughs:

“The Texas labor force is now approaching 14 million and has continued to provide employers with the skills and expertise needed to keep the Texas economy growing,” said TWC Commissioner Representing Labor Julian Alvarez. “TWC and the 28 local workforce development boards are committed to connecting Texas workers with available jobs.”

Employment estimates released by TWC are produced in cooperation with the U.S. Department of Labor’s Bureau of Labor Statistics. All estimates are subject to revision. To access this and more employment data, visit tracer2.com.

Follow us on Facebook, LinkedIn and Twitter for more updates about Texas Labor Market Data.

Texas Private-Sector Employers Add 42,800 Jobs in February

February employment data recorded a boost of 42,800 jobs in the Texas private-sector, marking 20 consecutive months of employment growth. Over the year, Texas added 285,200 jobs for an annual employment growth rate 2.3 percent in February.

“We are encouraged to see the Texas economy continue to expand at a solid pace with Texas adding 40,500 jobs over the month for a total of 285,200 jobs gained over the year,” said TWC Chairman Andres Alcantar. “Texas’ continued addition of jobs demonstrates the competitive advantages and market opportunities available to our employers and world-class workforce to compete and succeed.”

Texas’ seasonally adjusted unemployment rate remained unchanged at 4.0 percent in February and remains below the U.S. unemployment rate of 4.1 percent.

“Our businesses in Texas continue to thrive and grow in a strong economy, adding 42,800 jobs in February,” said Commissioner Ruth R. Hughs. “Texas has created an environment for success and continues to support additional business expansion for our broad range of industry employers.”

View the Texas Labor Market highlights from Commissioner Ruth R. Hughs:

Industries adding jobs in February included Professional and Business Services, which added 13,200 positions followed by Trade, Transportation and Utilities, which added 11,800 jobs, and Mining and Logging employers added 6,500 positions.

“Our state continues to build on its successes,” said TWC Commissioner Representing Labor Julian Alvarez. “We need to continue these efforts in building a better prepared workforce by continuing to offer training programs and training onsite. Our Skills Development Fund provides training grants to jobs, businesses and workers to fulfill a specific need we see in the workforce. We need to solve the problem of not having enough skilled workers by increasing opportunities for customizing job-training.”

 Follow us on Facebook, LinkedIn and Twitter for more updates about Texas Labor Market Data.

Texas by the Numbers: Top Occupations in Texas

Recently released employer survey data from the Texas Workforce Commission (TWC) provides a look at annual wage estimates for over 800 occupations, and highlights top paying jobs in Texas, as well as 10-year projected growth for top industries and occupations.

TWC’s Labor Market Career Information (LMCI) department compiles the data and makes it available to the public. The data includes employment statistics and customized information regarding occupational staffing trends, hiring patterns, salary and local employment history.

Current data shows the top 15 occupations were in healthcare. Other top occupations include chief executives, airline pilots and architects.

The Occupational Employment Statistics (OES) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for metropolitan and nonmetropolitan areas across Texas.

The Texas Wages and Employment Projections interactive web tool allows users to view a wide range of this wage data, including employment estimates for entry level and experienced level wages.

Here are several quick facts from the most recent Texas occupational employment report:

• Office and Administrative Support Occupations is the largest occupational group which accounts for 17% of Texas employment or about 2 million jobs.
• Twelve of the 15 highest paying occupations were healthcare occupations, including several physician and dentist occupations (all paying above $166,000).
• Registered Nurses, with 207,810 jobs, was the largest healthcare occupation. Most Registered Nurses worked in the General Medical and Surgical Hospitals industry (118,600).
• Registered Nurses ($70,390) was the largest occupation with above-average wages.
• Other than registered nurses, the largest healthcare occupations were Nursing Assistants (87,930), Licensed Practical and Licensed Vocational Nurses (70,810), and Home Health Aides (67,180).
• All computer occupations pay higher than the mean, median, entry and experienced wages for all occupations combined. Actuaries have the highest average wage of $121,300.
• The highest paying construction and extraction occupations were Elevator Installers and Repairers ($71,140) and First-Line Supervisors of Construction and Extraction Workers ($68,740).
• Construction and Extraction occupations had employment of 579,760 in May 2016, representing 4.9 percent of total Texas employment. Over 78 percent (450,000) of these jobs were in construction trades occupations, including Construction Laborers (100,600), First-Line Supervisors of Construction and Extraction Workers (68,270), Electricians (57,540) and Plumbers, Pipefitters, and Steamfitters (40,530).
• The largest occupation overall were retail salespersons (383,080) and General Office Clerks (363,020).

To learn more, go to www.tracer2.com. You can also keep up with the latest labor market data on Facebook, Twitter and LinkedIn.

Source: May 2016 Texas Occupational Employment and Wages

Related Stories:

• Texas Workforce Commission Announces “Careers in Texas Industries Week”
• Simulating Real Life in the Classroom
• Getting On the Job Training through the Texas Internship Challenge

 

Texas Economy Adds 38,300 Jobs in September

The latest Employment report shows that Texas added an estimated 206,800 seasonally adjusted jobs over the past year. Texas’ total nonfarm seasonally adjusted employment increased by 38,300 jobs in September’s preliminary estimate. The state has added jobs in 17 of the past 18 months.

Texas’ seasonally adjusted unemployment rate increased to 4.8 percent in September, up slightly from 4.7 percent in August, and remained below the national rate of 5.0 percent.

The Leisure and Hospitality industry recorded the largest industry employment gain over the month with 17,900 jobs added. Professional and Business services employment grew by 6,000 jobs in September. Construction employment expanded for the third consecutive month with the addition of 3,400 jobs.

The Amarillo and Austin-Round Rock Metropolitan Statistical Areas (MSA) recorded the month’s lowest unemployment rate among Texas MSAs with a non-seasonally adjusted rate of 3.5 percent, followed by the Lubbock MSA with a rate of 3.6 percent and the College Station-Bryan MSA with a rate of 3.7 for September.

Follow us on Facebook, LinkedIn and Twitter for more updates about Texas Labor Market Data.