Business, Legal & Accounting Glossary
The unemployment rate is the percentage of the labor force that is unemployed.
The U.S. Bureau of Labor Statistics publishes employment and unemployment rates monthly. The calculations begin with the ‘civilian labor force’, which basically is people in the 50 states and the District of Columbia over age 16 who are not institutionalized or incarcerated and not on active duty with the armed forces.
But not every teenager who spends her days studying at the library and not every man who spends his days fishing from the pier are considered unemployed. The unemployed are those who were available for work and looked for work, but had no employment. Those waiting to be recalled to a job from which they have been laid off can also be considered unemployed.
The unemployment rate is given as a percentage of the labor force, and the numbers can be broken down by geographic area, age, gender, race, and other considerations. Unemployment rates can also be seasonally adjusted to take into account predictable events such as harvests, major holidays, and the coming of winter.
From 2000-2007, the average annual unemployment rate ranged between a low of 4.0 in 2000 and a high of 6.0 in 2003.
The unemployment rate and how it changes are important indicators of an economy’s health. Unemployment and inflation usually have an inverse relation. One goes up; the other goes down. Stagflation is when both are on the upswing.
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This glossary post was last updated: 6th August, 2021 | 3 Views.