Unemployment Rate Calculator by State

With unemployment skyrocketing in virtually every state across the U.S., what are the criteria for calculating the numbers on the American jobless situation?
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No doubt, the U.S. economy is in peril – and it only takes one look at the burgeoning state-by-state unemployment figures to prove the point.

This from the U.S. Bureau of Labor Statistics, on April 17, 2020:

“The largest unemployment rate increases from March 2019 occurred in Louisiana (+2.4 percentage points), Nevada (+2.2 points), and Pennsylvania (+1.9 points), with another 12 states experiencing increases of a full point or more.”

Moving the lens closer, states took a huge leap in jobless rates from February to March, with April’s numbers looming even larger.

In a single month, for example, Arkansas’s unemployment rate jumped from 3.5% to 4.8%. Similarly, Colorado’s jobless rate almost doubled, from 2.5% to 4.5%. Ohio’s unemployment rate 4.1% to 5.5%, as well.

These are far and away the worst jobless figures in over a decade, dating back to the Great Recession.

“The coronavirus outbreak and measures taken in response to it have produced the nation’s first reported contraction in employment since September 2009,” said Mark Hamrick, a senior economics analyst at Bankrate.com. “The number of jobs lost and the rise in the jobless rate were worse than expected, reflecting the difficulty measuring the magnitude of the calamity we’re all too painfully aware of. We know the current situation is already much worse.”

Hamrick noted that the jobless figures that have gone public represent the tip of a very large and looming iceberg straight ahead.

“Wading through the March employment report is a bit like watching the telecast of a football game after knowing the final score and that the home team suffered a crushing defeat,” Hamrick added. “Because the household and establishment surveys were conducted around the 12th of the month, the damage to the economy that’s followed has been much more significant. This has been borne out in the two recent reports on new claims for unemployment benefits totaling about 10 million.”

The worst news? A big slice of the U.S. job market may never return to “normal” levels, Hamrick said.

“There’s no avoiding a substantial rise in the unemployment rate likely eclipsing the 10% level during the Great Recession," he said. "The real, unanswerable question at this point is how many of these jobs come back after social distancing guidelines are relaxed and businesses reopen. We hope for the best but brace for the worst.”

What Goes Into State Unemployment Numbers?

By definition, the U.S. labor force represents the number of Americans who are available to work. 

According to the U.S. Labor Department, the unemployment rate is determined by what economists call the “labor force participation rate.”

The unemployment numbers are shaped by the number of Americans who are prepared to work, but who are out of work even though they’re actively seeking employment.

To break that down further, the Labor Department breaks the job numbers down into three key areas:

By cyclical unemployment. This happens when there is a lack of demand in the U.S. economy, to fulfill the need of all jobless U.S. adults who want to find work.

By structural unemployment. This happens when the U.S. labor market can’t accommodate Americans who want a job, but can’t find one. The primary reason for that variance between jobs and the people who can’t get them is the lack of appropriate job skills needed for available jobs.

By frictional unemployment. This explains the time period between jobs when an American is either searching for a job or is moving from one job to another.

Once the Labor Department categorizes unemployment, it deploys a twin set of labor force surveys – the Current Population Survey and the Current Employment Statistics Survey.

The Current Population Survey – This survey is more widely known as the U.S. household survey, based on rolling surveys of 60,000 U.S. households. The survey focuses on working and non-working household members and measures the nation’s unemployment rate using the International Labour Organization’s standard definition of unemployment rate calculations.

The Current Employment Statistics Survey – This survey is better known as the U.S. payroll survey, which measures the jobless rate based on a nationwide sample of 160,000 companies and on a survey of U.S. government agencies that represent 400,000 employees.

To get a better grip on the U.S. unemployment rate, the Labor Department also tosses into the mix weekly national unemployment insurance claims. For example, in the three weeks leading up to April 4, 2020, the U.S. unemployment claim numbers rose from 3.3 million, to 6.9 million, and back down to 6.6. million on April 4.

Converging the different data points, the U.S. Labor Department is able to arrive at a nationwide unemployment rate once a month (usually provided on the first Friday of every month.)

To qualify for unemployed status based on U.S. government numbers, an American must be at least 16 years old (and must have been available for employment and actively be looking for a job) during the previous four weeks.

Those requirements do not include so-called “furloughed” workers – those Americans who have been temporarily released from the payroll by their companies, but will return to work at a later date. 

Furloughed workers can receive workplace benefits like health care insurance. After that, companies rely on unemployment claims to provide their workers a paycheck until the smoke clears and furloughed workers are called back to work.

An estimated one million U.S. workers were furloughed by their companies, as of March 31, 2020.

The Takeaway on the Unemployment Rate

Summed up, the formula for calculation the U.S. unemployment rate, which is also used by individual states to calculate their own jobless rates, is as follows:

Unemployment rate = Unemployed/Civilian Labor Force.

These days, the figures generated by that calculation and released by the federal government and each U.S. state are exceedingly bleak, thanks to the coronavirus pandemic.

Given the updated data on job losses, which have amounted to 26 million as of April 23, 2020, it’s going to take a while for those numbers to bounce back – a long while.