What is the effect of random variation in state unemployment rates?
The monthly unemployment rate reported by the Current Population Survey (CPS) is the best estimate of labor market activity available, but sometimes fluctuations in the unemployment rate are due to variance of the data series. Month-to-month movements in the rate are not meaningful without taking i...
| Published in: | Monthly Labor Review Vol. 110; pp. 41 - 47 |
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| Format: | Article |
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US Department of Labor
December 1987
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| Online Access: | View this record in EBSCOhost |
| Summary: | The monthly unemployment rate reported by the Current Population Survey (CPS) is the best estimate of labor market activity available, but sometimes fluctuations in the unemployment rate are due to variance of the data series. Month-to-month movements in the rate are not meaningful without taking into account random variation in sampling, so many users may be erroneously basing decisions or policy on these movements. The national CPS data and the impact that sample size has upon standard error are examined; the unemployment rate is examined cross-sectionally for 11 states; and monthly time series data for the state of Ohio are used to examine the statistical significance of movements in the monthly reported employment rate. |
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