What is the definition of Employed and Unemployed?

U.S. Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported on October 7.

Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August. New York State’s private sector job count declined by 30,700, or 0.4%, in August 2011. Most of the state’s private sector job losses in August were temporary and related to the Verizon strike, which included 17,000 striking workers in New York.

Next week Barack Obama will present his latest job package to Washington and has called for both sides to vote it through. The $447bn jobs bill will not pass without Republican support. Major stock indexes fell sharply. Economists once again ratcheted down their expectations for future growth. And many others implored the federal government, deadlocked on how to address the deficit and intent on cutting spending, to step up and help the flagging economy and the millions of unemployed get back on their feet.

The official shows the following

“Payroll employment has increased by an average of 72,000 per month, compared with an average of 161,000 for the prior seven months. In September, job gains occurred in professional and business services, health care, and construction. Government employment continued to trend down”

According the U.S. Department of labor’s Bureau of Labor Statistics, there are more than 25 million people currently unemployed — that’s including those involuntarily working part time and those who want a job, but have given up on trying finding one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. The above interactive map serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 — approximately one year before the start of the recession — to the most recent unemployment data available today.

Here are some good and bad news for Americans

Good News:

The U.S. unemployment rate dropped from 9.4 percent in December, 2010, to 9.0 percent in January, 2011.

The number of unemployed persons decreased by 622,000 in January to 13.9 million.  This is the lowest number of unemployed people since April, 2009.

Since the most recent low level in February 2010, total payroll employment has increased by an average of 93,000 per month.

Bad News:

In January, 2011, the U.S. economy created only 36,000 new non-farm jobs.

The U.S. labor force participation rate dropped to 64.2 percent, the lowest level since March, 1984.

In January, 2.8 million persons were marginally attached to the labor force, up from 2.5 million a year earlier.

CONCLUSION

The number of unemployed people dropped by 622,000 in January.  Where did they go?

The size of the labor force decreased by 504,000 in January.  Where did they go?

The number of people “not in the labor force” increased by 319,000. Where did they go?

The number of employed persons increased by 117,000, but the number of new jobs created in January was only 36,000. Where are they working?

The simple number of the unemployment rate and the number of “employed” do not tell the whole employment story.  The numbers are derived from two different sources that count different groups of people.

The Establishment Survey may undercount the number of people who are working and earning an income.  The Household survey may undercount “unemployment” by counting even those who worked just a couple of hours a week as employed.

So how do you define “employed” and “unemployed”?