Calculating the unemployment rate

Nonfarm payrolls jumped higher in May, yet so too did the unemployment rate - wondering why? Here's what you need to know.

In order to understand the employment picture in the United States, the first thing to know, is that employment is measured monthly via two different surveys: the establishment survey, and the household survey.

The establishment survey refers to the Current Employment Statistics (CES) survey, which surveys approximately 122,000 businesses and government agencies every month. From the CES survey, estimates of nonfarm payroll employment, hours worked and earnings are derived, with industry and geographic detail.

The household survey refers to the Current Population Survey (CPS), which is conducted by the U.S. Bureau of Census for the U.S. Bureau of Labor Statistics (BLS). Amidst other items, the CPS survey gathers estimates of the labor force, employment, and unemployment, with demographic detail.

The household and establishment survey measure employment differently

In addition to who is actually surveyed, there’s a number of technical differences between how employment is calculated betwee…