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The first Friday of every month sees the Bureau of Labor Statistics (BLS) reveal the previous month’s unemployment rate. Since the Great Recession of 2008 the BLS’s monthly announcements have been anticipated by political actors who wish to use the unemployment numbers to advance their agendas. The media also provides a lot of coverage of the recent unemployment data and use it to measure the health of the economy and the pace of America’s economic recovery. Last week the unemployment rate for December was announced as 6.7%, which is the lowest unemployment rate since October 2008. The initial reaction was to treat this as good news since the unemployment rate has fallen since 2010, when it reached a height of 9.9%. However, economists expressed worry that the unemployment rate is not reflecting actual events in the economy because the economy only added 74,000 jobs in December and the reason the unemployment rate is going down is because fewer Americans are looking for work.
Deciphering unemployment statistics can be difficult and extempers usually draw several questions a year that ask them to interpret unemployment data and what that data indicates about the health of the American economy. This topic brief will provide an explanation of how unemployment is calculated and different types of unemployment, break down the latest unemployment numbers, and discuss the political debate surrounding an extension of unemployment benefits for those Americans that have seen their benefits expire at the end of 2013.
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