The CPS,or current population survey,is the tool used by the Bureau of Labor Statistics to determine the monthly national unemployment rate.It's a telephone survey of approximately 60,000 households.This has been done since the 1940's and has been modified many times over the years.
The survey is based on a sample process that breaks down households from larger metropolitan areas down to blocks of 4 households.They conduct the telephone interviews for 4 consecutive months,off for 8 months,and then it's repeated.The idea is survey 50% of the households with-in a 2 year period.It's usually conducted during the week of the month with the 12th day in it.
There are about 1,500 employees that conduct these surveys using publicly available address databases and other sources such as building permits.There are approx. 115 million households in the U.S. and surveying 60,000 is only about .05%.There are about 154 million in the labor force with another 80 million meeting the age minimum of 15 years old who aren't in the labor force for various reasons.
Here's my problem.I'm 44 years old and been a homeowner for 20 years.I've never been contacted for this survey.I took a survey of my own and found that no one I know has ever been surveyed either.I wonder about those of you out there.Do you find similar results?
For those that pay attention to these numbers,many feel they are artificially low.The BLS does publish it's alternative measure tables and more people are paying attention to the U-6 measure which includes marginally attached workers to get a more accurate sense of the true unemployment rate.
As we see the reports of new claims filed each week exceeding half a million,these numbers bear more scrutiny.The only reason the official rate hasn't exceeded 10% yet is the large amount of people who drop out by not actively seeking work in the prior 4 week period.
It's interesting to go the BLS website and review the scenarios in which people are considered as employed.An example would be the wife of a small business owner who works at least 15 hours a week even if it's unpaid.She is counted as employed.Not to mention,these are merely telephone interviews in which the results are based on the homeowner responses.It's a relatively small sampling of the labor force and at least in my case,I don't know anyone ever interviewed.How accurate can this be?
During the Clinton era,the sampling number was dropped to 50,000 households and inner-city sampling was strictly limited.Yet magically,after he left office the number was restored to 60,000.Coincidence I'm sure.
We hear everyday that the stimulus is working,jobs are being saved,the stock market is soaring,etc.When you look between the lines and study other data,it doesn't support much optimism.So,I would suggest taking these "official" numbers with a grain of salt.More to come...