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 
  1. Employed population (EMP): Texans who are currently employed 
  1. 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 
  1. (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 
  1. 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)


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. 

Watch out for Identity Theft

Texas, like other states, is seeing large numbers of fraudulent applications due to identity theft. TWC wants to remind all Texans to protect their identities online so they don’t get swept up in the wave of unemployment insurance fraud applications. 

How is identity being stolen? 

TWC systems have not been breached or hacked which means data is being stolen through other channels. Sometimes the means to steal an identity can be found in information posted on social media or material found on web sites. All Texans should take steps to secure their identity online by practicing internet security best practices. Treat your TWC account and all accounts like you would your bank account. 

How much fraud is there really? 

Identities are being stolen at record rates, some in breaches of health insurance companies, hotels and in one of the largest cases, a consumer credit reporting agency. The number of identity theft complaints in America doubled in 2020. With the high-profile increase in unemployment claims due to COVID-19, fraudsters are seeking to capitalize.  

Who is responsible for the increase in stolen identities 

TWC systems have not been breached or hacked which means identity theft is occurring outside the system. A growing cybercrime community known as the Dark Web traffics in these stolen identities, passing them from hackers to fraudsters seeking to monetize your information. Even the hackers are being hacked. Government benefits programs are now the largest single target for these thieves, above even credit cards.  

How do I find out if someone filed unemployment under my name? 

If you receive a letter stating that you have applied for benefits, which you have not applied for, it is very likely you are the victim of identity theft.  

What do I do if someone filed for unemployment under my name? 

If you think someone has stolen your identity and filed a false claim, report it immediately on the TWC fraud portal. After that, follow these important steps:  

  1. Contact the police department in the city in which you reside and get an incident report and number.   
  1. Consult the Federal Trade Commission website to report the ID theft.  
  1. Contact one of the three credit reporting agencies listed below (you only have to call one because the law requires them to contact the other two) and ask that a free fraud alert be placed on your credit report. If needed, you can also ask to have your credit account frozen or request a free credit report.  
  • Equifax – 800-349-9960  
  • Experian – 888-397-3742  
  • TransUnion – 888-909-8872  
  1. If your bank or credit union account was compromised, contact the fraud department of each institution. Report the identity theft and, if needed, ask them to close or freeze the compromised account. If your ATM card was compromised, contact your financial institution and request a new card.  
  1. If unauthorized charges appear on your legitimate credit cards, cancel the cards and request replacement cards with new account numbers. If an authorized card was opened using your ID, cancel the cards and close the accounts.  
  1. Contact the Social Security Administration office in one of the following ways:  
  • Visit www.ssa.gov and type “identity theft” in the search box  
  • Call: 800-269-0271  
  • Fax: 410-597-0118  
  • Social Security Fraud Hotline  

PO Box 17785  

Baltimore, MD 21235  

What happens after I report fraud?  

The Texas Workforce Commission investigates every unemployment benefit claim to confirm identity and quickly locks accounts that are fraudulent.  Fraud tips are investigated immediately but bear in mind you may not hear back right away.  

With such a large increase in the volume of UI claims and corresponding fraud, TWC has prioritized investigation over notification, in order to stop fraud in its tracks and protect the integrity of the UI trust fund. Nonetheless, TWC is hiring additional agents to improve response times. For more information about identity theft fraud, see TWC’s fraud web page.   

Extended Benefits and the American Rescue Plan

What is the American Rescue Plan? 

The American Rescue Plan (ARP) is an emergency legislative package that was signed into law by President Joseph R. Biden, Jr. to provide continued relief to families and individuals that have been affected by the COVID-19 pandemic. ARP, among other items, extends UI benefits created under the CARES and Continued Assistance Acts through September 4, 2021 (TWC benefit weeks end on Saturdays).  

What benefits did the American Rescue Plan extend? 

ARP extends Pandemic Emergency Unemployment Compensation (PEUC), Mixed Earners Unemployment Compensation (MEUC), Federal Pandemic Unemployment Compensation (FPUC), and Pandemic Unemployment Assistance (PUA) through September 4, 2021.  

What do I need to do? 

All you need to do is keep requesting payments on your scheduled filing days and search for work as instructed by TWCYou do not need to take any additional action, reapply for benefits, or contact TWC and/or the Tele-Center. TWC will automatically update your claim and inform you of your potential eligibility. If we need any information from you, we will contact you. 

Understanding your 1099-G

Closeup of overlapping tax forms, Form 1099G Certain Government Payments, Federal Income Tax Withheld $0.00, with stack of cash, blank form boxes.
Closeup of overlapping tax forms, Form 1099G Certain Government Payments, Federal Income Tax Withheld $0.00, with stack of cash, blank form boxes.

What is a 1099-G?

A 1099-G is a document the TWC will create and send to you early in the year if you were paid any unemployment benefits during the last calendar year. You need the information from your 1099-G to complete your federal income taxes to the IRS.

A 1099-G lists the total amount of benefits TWC paid you including:

  • Unemployment benefits (both regular and federal extended benefits)
  • Federal income tax withheld from unemployment benefits, if any
  • Alternative Trade Adjustment Assistance (ATAA) and Reemployment Trade Adjustment Assistance (TAA) payments

Do I need to send a copy of my 1099-G to the IRS?

No, you don’t need to submit a copy to the IRS. TWC reports 1099-G information to the IRS so all you need to do is use the information on the 1099-G as a resource for filling out your federal income tax return.

How do I get my 1099-G?

TWC will mail you your 1099-G to the address we have on file. If you need another copy, you can request one by phone:

  1. Call Tele-Serv at 800-558-8321.
  2. Select option 2 and follow the prompts.

What if I never got my actual 1099-G?

If you never received your 1099-G in the mail, don’t worry, you can get the information you need for your taxes online or over the phone. Logon to the unemployment benefits portal. On the left-hand side of the screen, select the link, IRS 1099-G Information under the Quick Links heading. IRS 1099-G Information will then open. This page contains all of the 1099-G information you will need for your federal income tax return. Or you can call 1-800-558-8321, select option 2 and follow the prompts.

Remember, you do not need a paper copy of Form 1099-G to file your federal tax return; the IRS only needs some of the information found on it.

What should I do with my 1099-G information?

Your 1099-G information should be kept for your records and used to help complete your federal income taxes to the IRS. The information on the 1099-G form you will need to provide to the IRS are:

  • The TWC Federal ID number : 74-2764775.
  • Unemployment Compensation (Box 1 on the 1099-G)
  • Federal Income Tax Withheld (Box 4 on the 1099-G)

You can also find this information in an easy-to-read format in your unemployment benefits portal by clicking on IRS 1099-G Information under the Quick Links heading

How do I calculate the total amount listed on my 1099-G?

Your 1099-G shows the total amount of all unemployment benefits we paid you in the previous calendar year. Your claim and payment status on UBS shows the payments made to you. You can add up the payments made to you to confirm the number on the 1099-G. You can also use your yearly deposits from your bank if have direct deposit or you get an annual statement for your debit card that should have all of the historical data on file. Once you collect all of that data, you should be able to add it all up and equal what is listed on your 1099-G.

When adding up the payments made, remember that your 1099-G reflects all of the benefits paid to you that year regardless of any repayments you have made. For example, if you had an overpayment in March and repaid it in November of the same year, TWC cannot deduct the amount of the overpayment on the 1099-G because it is part of the total amount of benefits we paid you. You may be able to adjust your tax return to account for the repayment, but TWC cannot change the 1099-G, because the total amount of benefits we paid is correct.

What if the information on my 1099-G does not equal what I thought it would be?

Your 1099-G shows the amount we paid you. For some, the 1099-G amount may be different than what you expected due to:

  • Overpayment. We report the total amount of benefits we paid you in the previous calendar year, regardless of whether you repaid any or all of the overpayment.
  • Benefits we absorbed or withheld to reduce an overpayment
  • Debit card payments voided because you did not activate the debit card within one year of the deposit
  • Delayed payments issued for a prior claim
  • Payments issued in the reporting year that were canceled in the next year
  • Another change to your claim

Please be aware, TWC cannot change amounts reported on any 1099-G form. However, if you have been the victim of fraud, or the amount listed on the form needs to be increased, TWC will provide you with additional documentation for your records. 

What if I made payments on, or paid off, my overpayments?

If you repaid part or all of an overpayment, the IRS allows you to deduct the repaid amounts on your income tax return. You can use these IRS instructions or you can contact the IRS directly or a tax professional.

What if I got a 1099-G but I didn’t claim or receive any benefits last year?

If you got a 1099-G but never claimed or received benefits, you should report this immediately at https://mft.twc.state.tx.us/form/UIfraudENG. Once you report fraud we will investigate your situation. Please be aware, you may not get acknowledgment you reported the fraud, but don’t worry, if you reported it at the site above, we have it and we are investigating. TWC investigators will contact you to gather additional information, when necessary.

We appreciate the efforts of workers and employers alike in helping us quickly identify unemployment insurance fraud and identity theft. In most cases, we detect fraud before any benefits are paid out. When we identify fraud, we quickly lock down accounts, thus protecting individuals and the State of Texas.

TWC Begins Payments under CARES Act Extension

Those with exhausted benefits will be automatically re-enrolled; do not need to re-apply.

Coronavirus Aid, Relief, and Economic Security CARES Act on the desk.

TWC has moved quickly to begin paying benefits under the CARES Act extension. We received Department of Labor (DOL) guidance on implementing the act on Friday, and over the weekend, our teams modified over 1.1 million current active benefit claims allowing customers to begin transitioning to the new extensions. We then began to make those payments the following Monday. In the first two days alone, TWC paid out over 44 million in the first two days. And this is the $300 per week payment alone.

Under the federal legislation, all Texans who are still unemployed due to COVID-19 and qualified for benefits will have them extended until March 13. This includes Pandemic Emergency Unemployment Compensation (PEUC) and Pandemic Unemployment Assistance (PUA). They will also receive an additional $300 per week under the Federal Pandemic Unemployment Compensation (FPUC) program.

  • No one should have to reapply for benefits.
  • If you are currently receiving benefits, continue to request payment.
  • If your benefits have been exhausted, we will automatically re-enroll you. If we need further information from you, we will contact you.
  • Regardless of when benefits were exhausted, all new benefits under the extended CARES Act begin with the week ending Jan 2 and will continue until March 13. People who did not receive that first week will get it backdated. There will be no back-dating of federal benefits prior to that week.

You do not need to contact the Texas Workforce Commission (TWC) about these extensions. Due to high call volume at this time, you may experience difficulties reaching a customer service representative, and calling unnecessarily will cause delays for other Texans.

We are working expeditiously on updating eligible claims to take advantage of the new law and will make the necessary updates to your claim and notify you of your potential eligibility. If more information is needed, we will contact you with instructions.

Remember to monitor your email and check the TWC COVID-19 Resources Job Seekers webpage for current information and updates.

Additional information and resources:

There are many job openings in Texas right now. For help finding a job, please visit WorkInTexas.com, the state’s powerful online job matching and workforce services system, or use the virtual and in person services at local Workforce Solutions offices located throughout the state.

Protect Your Privacy on Social Media

Posting Personal Information Only Aids Scammers

If you are eligible for unemployment benefits in Texas, or seeking to find work, would you want your hard-earned dollars going to a scammer instead? That’s the risk many Texans take when they don’t protect their private information online.

Many Texans seeking unemployment insurance (UI) benefits are turning to Internet forums, chat sites and Facebook Groups to learn more about how UI works and to seek advice from others who have knowledge to share. While TWC encourages any private sites that provide factual information and help spread information about the resources we offer, even legitimate sites can be magnets for scammers, identity thieves and others seeking to gain at the expense of Texans needing help.

That’s why TWC encourages Texans to stay safe on online forums and groups. Never post the following:

  • Your phone number
  • Social Security number
  • Family or other personal details
  • Your work history
  • Screen shots that may include private information

Posting this or other information could be used by a scammer for identity theft reasons, or to target you for a too-good-to-be-true job opening. A scammer might even try to contact you offering to help you secure benefits for a cash payment. No one can file claims for benefits for you except you, and there is NEVER a charge to file.

Even if you do everything right, you still can be targeted by fraudsters. Starting with an identity found on social media, they can piece together publicly available information from other sites to put together an enticing pitch. Use common sense, verify phone numbers and email addresses whenever possible, and never pay anyone to help you find a job except legitimate recruiters.

If you are receiving TWC benefits and think you may have been the victim of identity theft, contact TWC immediately at our Fraud and Program Abuse Hotline 800-252-3642, or through our online fraud submission portal here. The Internet can be a dangerous place. Never let your guard down.

How do I complete my Work Search Requirements?

On November 1, 2020, the Texas Workforce Commission (TWC) reinstated work search requirements. TWC set the maximum number of work search activities claimants will be required to complete each week at 3 but, gave each local workforce area the ability to lower the required number based on the COVID-19 case numbers and hospitalizations in their area. Work search is a federal requirement that TWC suspended March 2020. Work search actives can be completed safely online and will help prepare claimants for the expiration of CARES Act funding on December 26, 2020.   

How many activities do I need to complete? 

TWC provided all claimants with a work search letter that lists the specific number they are required to meet. Depending on your preference you received this either through the mail at your mailing address or via electronic correspondence on your online unemployment benefits account. If you cannot locate your work search letter, no worries, use this link to locate the number of work search activities required in your workforce area.  

know my required number of work search activities. What do I have to do to complete them? 

First, you will need to identify that type of unemployment you are on. You can locate this information in your Statement of Benefits letter sent from TWC to either your physical mailbox or correspondence inbox.  

Once you know what type of claim you have, utilize the below chart to identify work search activities you can complete.  

I am self-employed, how do I complete work search activities? 

Self-Employed PUA claimants are required to undertake activities to resume their business and must certify this when requesting payment for unemployment benefits bi-weekly.  If the business will not reopen, Self-Employed PUA claimants are required to perform work search activities, meet the minimum number of weekly work search activities, and apply for jobs suitable to their skills and talents. They also have a resume waiting for their completion in WorkInTexas.com, the opportunity to apply for work through WorkInTexas.com, and have the same resources available to them as other job seekers through Workforce Solutions offices. 

I’ve completed my required number of work search activities, how do I let TWC know? 

Next time you request payment, TWC will ask if you have completed work search activities. You will confirm that you have completed them. Unless TWC contacts you for additional information, no further action is needed from you. Your work search requirements for the weeks you requested payment are complete! Just keep records to show you completed them.  

What additional information could TWC ask for? 

TWC may ask for your work search log. Claimants should keep a record of the work search activities they complete. We suggest you utilize this work search log. You will only need to submit these to TWC if asked. But you do need to make sure you keep your work search log for one year. While TWC may not ask for it right away, we have the right to ask for it within the claim year.