A simple guide to how Michigan measures unemployment

The Michigan Department of Technology, Management & Budget’s (DTMB) Bureau of Labor Market Information and Strategic Initiatives is a one-stop shop for information and analysis on Michigan’s population, labor market, and more.  

• Our Federal-State Programs division runs the state’s cooperative agreements with the U.S. Bureau of Labor Statistics and U.S. Census Bureau, making us the official state source for this information. 
• Our Research and Analytics division conducts workforce research and program evaluation, which provides the insights necessary to make smart decisions. 

As part of our work with the U.S. Bureau of Labor Statistics, each month we analyze results from two surveys that give us the unemployment rate and payroll jobs numbers. These numbers are major economic indicators and provide consumers, businesses, and policy makers valuable information to support important decisions.  

The Household Survey

The unemployment rate comes from a monthly survey of households called the Current Population Survey. During the “reference period,” which is always the week that includes the 12th of the month, surveyors from the U.S. Census Bureau interview 60,000 households nationally, including about 1,200 in Michigan, to determine who is and who is not in the labor force. Of those who are in the labor force, interviewers determine who is employed and who is unemployed.?  

• To be unemployed, a person must have had no earnings from a job during the reference period or survey period. They also must be actively looking for work during the four weeks prior to the survey, and they must have been available to accept a job if it had been offered. 
• Those who are employed are people who did any work as a paid employee, worked in their own businesses or on a farm, or worked 15 hours or more as an unpaid worker in a family business. Employed people also include those who are temporarily absent from work due to illness, vacation, bad weather, personal reasons, or labor disputes.?  

Mathematically, the unemployment rate is the number of residents classified as unemployed divided by the labor force.?  

One common misperception is that the unemployment rate reflects the number (or share) of residents receiving unemployment insurance benefits.?In fact, people can count as unemployed regardless of whether they receive unemployment benefits. 

Information on the labor force and unemployment is available for the state, all counties, and cities and townships with a population of 25,000 or more. This information is also released monthly by DTMB Communications and can be found online.  

The Establishment Survey

A second survey is conducted during the reference period, this one targeting businesses. The Current Employment Statistics survey asks about 16,000 businesses in Michigan to report the number of workers they have on their payroll, hours worked, and wages paid. Aggregate employment results are adjusted for seasonality and published for each major industry in the state. These estimates allow for month-to-month and year-over-year comparisons of payroll jobs by industry. 

This survey is one of the earliest economic indicators available to analyze current economic conditions. These data are used by both the public and private sectors to assess the growth of industries, determine swings in the business cycle, negotiate labor contracts, and to assist in many other important decisions. 

Information on payroll jobs is available for Michigan and its 14 metropolitan statistical areas. This information is also released monthly by DTMB Communications and can be found online.

To learn more about the Bureau of Labor Market Information and Strategic Initiatives, please visit our website. Once there, you can sign up to receive data releases, view our flagship publication, Michigan’s Labor Market News, and interact with our tools and technologies. Follow us Twitter at @MILMISI.