W Post: How the Government Tallies That Grim Jobless Rate

[Omaha Steve]

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/09/AR2009010903710.html

By Frank Ahrens
Washington Post Staff Writer
Saturday, January 10, 2009; Page D02

Yesterday morning, the Labor Department released its grim December jobs report -- 524,000 jobs were lost that month, bringing the 2008 total to 2.6 million and pushing the nation's unemployment rate to 7.2 percent, the biggest since 1993.

But how exactly does the government figure unemployment?

Like many big reports, the Labor Department's monthly jobs report is based on data that is extrapolated from a randomly selected sample of all U.S. households, a much smaller group than the total number it seeks to determine.

For the monthly jobs report, the Labor Department contacts 60,000 households to determine the unemployment picture for the entire workforce, which consists of about 154 million Americans.

This is how almost all big surveys are done. Statistically speaking, if you're trying to get data out of a large population -- like a national presidential poll -- once you survey about 1,000 randomly selected people, you can be 95 percent confident that the answers you get are within 3 percentage points of the actual number. If you count every person, it's not a survey; it's a census. (And that is very expensive and time-consuming.)

FULL story at link.