How is the unemployment rate determined?

Answer 1

The unemployment rate is based on a monthly survey of 60,000 households. If people are working, they are counted as employed. If they are seeking work, they are counted as unemployed.

For complete information from the U.S. Bureau of Labor Statistics, refer to the item "Where do the statistics come from" in the Related Link below.
First, the state has to know how many people are in the work force. Those who are employed are known because each employer (those that are required to), pays the state an unemployment tax based on the number of employees and the payroll he has. Social Security taxes are also collected, so the number is known, but the I.D. of the individual is not recorded here. Then the state's unemployment office reports how many people are applying for unemployment compensation. Adding those working, and those unemployed gives the total work force and when you divide the unemployed by the total potential work force, you have the unemployment rate. Where it becomes inaccurate is when some employers do not report their workers and some out of work unemployeds have given up looking for work and/or run out of eligibility and are not counted as such.

Answer 2

First, why the unemployment rate is calculated... it's to help legislators determine measures to influence future courses of the economy, to help in the creation of jobs. As to how it's done..the government takes the number of unemployed workers (jobless, available for work, looking for work..drawing unemployment benefits(?)) and divide that number by that figure and those employed, the total work force (although the under employed fit in here somewhere, too). The resultant figure is the unemployment rate (using the entire work force). Not counted in either category are those under age 16, institutionalized (i.e. hospital, jail, etc.), military, retired, and those who have given up looking for a job. See the Related Link below for more information.