Question

According to the U.S. Department of Labor, the unemployment rate in January of 2012 in the United States was 8.3\%. According to the same department, the unemployment rate in January of 2016 was \(4.9 \%\). According to the U.S. Department of Labor, how did the unemployment rate change from January 2012 to January 2016 ? A) It decreased by \(79 \%\). B) It decreased by \(41 \%\). C) It decreased by \(34 \%\). D) It increased by \(41 \%\).

Short answer

B) It decreased by \(41 \% \).

Step-by-step solution

Identifying the initial and final unemployment rates

First, let's identify the initial (January 2012) and the final (January 2016) unemployment rates. The initial unemployment rate is \(8.3 \%\) and the final unemployment rate is \(4.9 \% \).

Find the change in unemployment rates

To find the change in unemployment rates, we subtract the final unemployment rate from the initial unemployment rate: Change in unemployment rate = Initial unemployment rate - Final unemployment rate = \(8.3 \% - 4.9 \% = 3.4 \% \).

Calculate the percentage change

To calculate the percentage change, we divide the change in unemployment rate by the initial unemployment rate, and then multiply by 100: Percentage change = \(\frac{Change \, in \, unemployment \, rate}{Initial \, unemployment \, rate} \times 100\) = \(\frac{3.4 \%}{8.3 \%} \times 100 \approx 40.96 \% \) The percentage change is approximately \(41 \% \). The unemployment rate decreased, so the correct option is: B) It decreased by \(41 \% \).

Key concepts

Percentage Change Calculation

Understanding how to calculate percentage change is crucial for analyzing data, especially when comparing figures over time. To find the percentage change, you first determine the absolute change between two numbers, in this case, unemployment rates. Here's a simple breakdown of how to do it:

• Identify the initial value (starting point).
• Identify the final value (ending point).
• Subtract the final value from the initial value to find the change.

This change is then divided by the initial value, showing how significant the change was relative to where it started. Finally, multiplying this result by 100 converts it to a percentage, making it easier to understand. This method allows you to efficiently express changes in data points, which is vital for reporting economic activities.
In the unemployment rate problem, the initial rate was 8.3%, and the final rate was 4.9%. The difference or change in values was 3.4%. By following the steps and formula given, the percentage change was calculated to be approximately 41%, indicating how much the unemployment rate decreased over four years.

U.S. Department of Labor

The U.S. Department of Labor is a key governmental body that gathers data and statistics on employment within the United States. It plays a pivotal role, especially regarding workforce data, which includes unemployment rates. This department’s mission is to foster, promote, and develop the welfare of wage earners, job seekers, and retirees by improving working conditions, advancing opportunities for profitable employment, and assuring work-related benefits and rights.
When analyzing unemployment rates, the U.S. Department of Labor is a reliable source because of its comprehensive and meticulously collected data. They provide reports such as the monthly job reports, which highlight changes in employment sectors, shifts in labor trends, and current unemployment statistics.

• They collect and analyze data on employment and unemployment rates.
• They provide resources to aid in understanding labor market trends.
• The data collected is vital for policymakers and economists to make informed decisions.

By understanding the role of this department, students and analysts alike can appreciate the importance of the data provided, which can be used to understand broader economic conditions.

Data Analysis

Data analysis involves a set of processes that help interpret raw data, enabling one to make sense of information through systematic methods. When it comes to unemployment rate data, this involves collecting, reviewing, and presenting the data sets so that actionable insights can be extracted.
For the unemployment rate example, data analysis involves comparing figures from different time periods, like from 2012 and 2016 in this case. Performing a percentage change calculation is part of this analysis as it shows the rate of change between these periods.

• Collect data accurately, ensuring reliability and relevance.
• Organize the data to identify trends and patterns.
• Interpret the results to provide insights into economic conditions.

By employing data analysis techniques, users can identify changes in employment levels, which can signify economic growth or contraction, necessitating potential policy interventions.

Economic Data Interpretation

Interpreting economic data translates numerical figures into insights about the state of the economy. This interpretation helps understand larger economic narratives, such as the impact of unemployment on society, economic health, or policy effectiveness.
Regarding the unemployment rate, interpreting such data provides clues about the economy's strength. A decreasing unemployment rate, for example, might suggest an improving job market and economic growth.

• Analyze what the data tells you about the economic condition.
• Correlate data trends with real-world economic phenomena.
• Understand context and causality for more comprehensive insights.

Economic data interpretation requires critical thinking to contextualize data against historical or current economic policies and conditions. By accurately interpreting this data, economists and students can predict future trends and make informed decisions.