Question

Explain how the U.S. government calculates the official unemployment rate

Short answer

The U.S government conducts a survey consistently called the Current Population Survey to measure the degree of unemployment in the country.

Step-by-step solution

Introduction

Unemployment refers to the situation when a person is willing and able to work and is looking for jobs but is not able to find one. A high unemployment rate is harmful to the economy.

Explanation

The current population survey covers many households. The residents of these households are asked questions about their status of work. Based on the responses to these questions the Bureau of Labor Statistics estimates the all-out labor force which gets partitioned into sections of utilized and unemployed. Once, the labor force is isolated into utilized and unemployed, the Bureau estimates the current unemployment rate percentage of the labor force that is unemployed.