The Current Population Survey (CPS) is a foundational economic indicators and labor statistics program in the United States. Conducted jointly by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics (BLS), the Current Population Survey is a monthly household survey that serves as the primary source for comprehensive data on the nation's labor force participation rate, employment rate, and unemployment rate49. It gathers detailed economic and demographics data from approximately 60,000 households across the country each month.
History and Origin
Before the 1930s, the United States lacked a consistent monthly survey to accurately count unemployed persons. The widespread unemployment experienced during the Great Depression highlighted the critical need for such statistics, leading various research groups and state governments to experiment with direct surveys of the population47, 48.
In 1940, the Works Progress Administration (WPA) initiated a national sample survey of households called the "Monthly Report of Unemployment" to measure labor force, employment, and unemployment levels44, 45, 46. This survey was transferred to the Census Bureau in 1942 and was later renamed the Current Population Survey in 1948 to reflect its broader scope beyond just unemployment, encompassing a wide array of demographic, social, and economic characteristics of the population42, 43. In 1959, the responsibility for analyzing and publishing the labor force data from the Current Population Survey was transferred to the BLS, while the Census Bureau continued its role in data collection41. The survey has undergone continuous improvements and redesigns over the years, including a major overhaul in 1994 and ongoing modernization efforts to adapt to changing data collection environments and improve response rates39, 40.
Key Takeaways
- The Current Population Survey (CPS) is a monthly household survey conducted by the U.S. Census Bureau for the Bureau of Labor Statistics.
- It is the primary source of labor force statistics in the U.S., including the official unemployment rate.
- Data from the CPS is used to produce the monthly "Employment Situation" report.
- The survey collects a wide range of demographic and economic data beyond just employment status.
Interpreting the Current Population Survey
The Current Population Survey provides crucial insights into the health and dynamics of the U.S. labor market. Interpreting its results involves understanding various key measures. The unemployment rate, derived from the Current Population Survey, indicates the percentage of the labor force that is jobless and actively seeking employment38. The labor force participation rate reveals the proportion of the civilian noninstitutional population aged 16 and over who are either employed or actively looking for work37.
Analysts also examine the employment-population ratio, which shows the proportion of the civilian noninstitutional population that is employed36. Beyond these headline figures, the Current Population Survey offers detailed breakdowns by age, sex, race, education, and other demographic characteristics, allowing for a granular understanding of labor market trends across different segments of the population34, 35. Shifts in these numbers provide signals about economic growth and potential inflationary pressures, influencing discussions on monetary policy.
Hypothetical Example
Consider a hypothetical scenario in which the latest Current Population Survey report indicates an unexpected rise in the unemployment rate from 3.5% to 3.8% in a given month. This shift, even if slight, prompts economists to analyze the underlying causes. They would examine the detailed CPS tables to see which demographic groups or industries experienced the most significant changes in employment. For instance, if the increase in unemployment was concentrated among recent college graduates, it might suggest a mismatch between available jobs and skills, or a slowdown in entry-level hiring.
Conversely, if the increase was primarily among workers aged 55 and over, it could point to issues like early retirements or difficulties in re-entering the workforce. Analysts would also look at the labor force participation rate to determine if people are leaving the labor force entirely or simply transitioning between jobs. This granular insight helps policymakers and businesses understand specific challenges within the economy, rather than just the aggregate picture.
Practical Applications
The Current Population Survey plays a vital role in informing economic policy, academic research, and business strategy. Its data are essential for government agencies, including the Federal Reserve, in assessing the health of the economy and formulating policy responses related to fiscal policy and monetary interventions33. The BLS uses CPS data to publish its monthly "Employment Situation" report, a key economic indicator that provides timely insights into employment and unemployment trends32.
Researchers utilize the extensive microdata from the Current Population Survey to study various topics, such as wage growth, poverty, income inequality, health insurance coverage, and educational attainment30, 31. For businesses, understanding trends revealed by the CPS can inform decisions related to hiring, talent acquisition, and market analysis, particularly when assessing consumer spending patterns or shifts in the overall business cycle. The official Current Population Survey data and related publications are readily available on the BLS website for public access and analysis.29
Limitations and Criticisms
While the Current Population Survey is a critical source of labor market data, it is subject to certain limitations and criticisms. One common critique revolves around the survey's reliance on self-reporting by household members, which can introduce response bias, where individuals may unintentionally or intentionally provide inaccurate information, such as overstating income or underreporting hours worked26, 27, 28. Non-response bias is also a concern, as declining response rates in recent years could impact the representativeness of the data, despite weighting adjustments by the Census Bureau23, 24, 25.
Additionally, the sample size, while substantial, may not always be large enough to provide highly precise estimates for very specific subgroups or small geographic areas20, 21, 22. The design and methodology of the Current Population Survey are continuously reviewed and improved, but inherent challenges in large-scale data collection and statistical analysis mean that the data may not perfectly capture all nuances of the complex labor market18, 19. For example, the survey's classification of employment status might not fully capture emerging non-traditional work arrangements, such as gig work17.
Current Population Survey vs. Establishment Survey
The Current Population Survey (CPS) is often compared with the Establishment Survey, also known as the Current Employment Statistics (CES) survey or payroll survey. Both are monthly surveys conducted by the BLS that provide insights into U.S. employment, but they have distinct methodologies and scopes14, 15, 16.
The Current Population Survey is a household survey that collects data by interviewing individuals in approximately 60,000 households. Its primary goal is to measure the labor force status of the civilian noninstitutional population aged 16 and over, providing data on the number of employed people, the unemployment rate, and the labor force participation rate12, 13. It includes agricultural workers, the self-employed, unpaid family workers, and private household workers, and counts individuals on unpaid leave as employed10, 11.
In contrast, the Establishment Survey collects data from approximately 119,000 businesses and government agencies, covering payroll records for about 629,000 individual worksites9. This payroll survey focuses on nonfarm payroll employment, hours, and earnings, providing detailed industry-specific data on the number of jobs in the economy7, 8. A key difference is that the CPS counts people, meaning a person with multiple jobs is counted only once, while the Establishment Survey counts jobs, meaning a person with two jobs is counted twice4, 5, 6. While both surveys generally show similar trends, their differing coverage and methodologies can lead to occasional discrepancies in their reported employment figures1, 2, 3.
FAQs
What is the main purpose of the Current Population Survey?
The main purpose of the Current Population Survey is to provide comprehensive monthly data on the employment and unemployment experience of the U.S. population. It is the official source for the national unemployment rate and other key labor force statistics.
Who conducts the Current Population Survey?
The Current Population Survey is a joint effort between the U.S. Census Bureau, which collects the data, and the U.S. Bureau of Labor Statistics (BLS), which analyzes and publishes the labor force statistics.
What kind of information does the Current Population Survey collect?
Beyond employment and unemployment status, the Current Population Survey collects a wide array of demographics and economic data. This includes information on age, sex, race, education, marital status, earnings, occupation, industry, and reasons for unemployment or not participating in the labor force.
How is the Current Population Survey data used by economists?
Economists use Current Population Survey data to monitor the health of the labor market, analyze trends in employment rate and unemployment, assess income distribution, and study the impact of economic policies. It provides crucial insights into economic performance and social well-being.