50,000 U.S. households are surveyed with a number of questions. One of these is "How many people in your household are currently working." Another is "How many people in your household are activly looking for work." These 2 questions are the heart of the unemployment calculation and leads to several fundamental problems.
People who are unemployed and who have given up looking for work because they are having no luck finding a job are not counted as unemployed. People who are working and are actively looking for a better job are counted as both employed and unemployed at the same time, at least it appears this way.
When the economy starts to pick up and businesses are hiring you can expect the unemplyment rate to increase for at least another year. This is because the people who have given up looking for work now think there is a better chance of finding work and will begin looking again and people unhappy with their jobs will begin looking for a different job.
The number to look at is the payroll numbers not the unemployment rate, when payroll numbers go positive then things are improving even though unemployment will continue to increase.
