<< Chapter < Page Chapter >> Page >

By the end of this section, you will be able to:

  • Calculate the labor force percentage and the unemployment rate
  • Explain hidden unemployment and what it means to be in or out of the labor force
  • Evaluate the collection and interpretation of unemployment data

Unemployment is typically described in newspaper or television reports as a percentage or a rate. A recent report might have said, for example, from August 2009 to November 2009, the U.S. unemployment rate rose from 9.7% to 10.0%, but by June 2010, it had fallen to 9.5% . At a glance, the changes between the percentages may seem small. But remember that the U.S. economy has about 155 million adults who either have jobs or are looking for them. A rise or fall of just 0.1% in the unemployment rate of 155 million potential workers translates into 155,000 people, which is roughly the total population of a city like Syracuse, New York, Brownsville, Texas, or Pasadena, California. Large rises in the unemployment rate mean large numbers of job losses. In November 2009, at the peak of the recession, about 15 million people were out of work. Even with the unemployment rate now at 5.5% as of February 2015, about 8 million people total are out of work.

The Bureau of Labor Statistics tracks and reports all data related to unemployment.

Who’s in or out of the labor force?

Should everyone without a job be counted as unemployed? Of course not. Children, for example, should not be counted as unemployed. Surely, the retired should not be counted as unemployed. Many full-time college students have only a part-time job, or no job at all, but it seems inappropriate to count them as suffering the pains of unemployment. Some people are not working because they are rearing children, ill, on vacation, or on parental leave.

The point is that the adult population is not just divided into employed and unemployed. A third group exists: people who do not have a job, and for some reason—retirement, looking after children, taking a voluntary break before a new job—are not interested in having a job, either. It also includes those who do want a job but have quit looking, often due to being discouraged by their inability to find suitable employment. Economists refer to this third group of those who are not working and not looking for work as out of the labor force    or not in the labor force.

The U.S. unemployment rate, which is based on a monthly survey carried out by the U.S. Bureau of the Census, asks a series of questions to divide up the adult population into employed, unemployed, or not in the labor force. To be classified as unemployed, a person must be without a job, currently available to work, and actively looking for work in the previous four weeks. Thus, a person who does not have a job but who is not currently available to work or has not actively looked for work in the last four weeks is counted as out of the labor force.

Employed : currently working for pay

Unemployed : Out of work and actively looking for a job

Out of the labor force : Out of paid work and not actively looking for a job

Questions & Answers

what is equillibrium
riy Reply
Equilibrium is a state of balance e.g supply equals demand then there is no oversupply or shortage of goods
Scelo
When price increases quantity demnd alway decreases
Sonu Reply
this is because when price increase,consumer can longer effort to pay as they usually do thereby leading to the fall in dd
Muafue
Explain the impact of increase price of substitude goods an equilibirum price and equilibirum quantity
Sonu
Again according to the first law of demand which state that more is demanded at higher price than at lower price.Because of this consumer believe that more can only be demand at low prices than higher prices meaning that a slide change in price will affect demand
Muafue
what are the functions of money?
Liza Reply
medium of exchange
Alhassan
Medium of exchange,store of value,standard for differ payment and unit of account
Muafue
A medium of exchange for goods and services
Allen
what is demand for labour?
Allen
boumols inventory theory?
Vyshnavi Reply
what is inflation?
Jestony Reply
the increase in general price level and the decrease in money value
Inflation can be define as the persistence rise in the general price level of goods and services in the market
Muafue
what are the three reason tgat we study economics
armaan Reply
we may be rational people, know efficient where met profit maximization, know efficient allocation
li
1.How monetary and fiscal policy create stable economy. 2. How to create fairness for all citizens. 3. Determine drivers of human economic behavior.
Mark
To know that you we need understand the demand and supply and others important matters in economics
emz
can you explain. what is the reasons for having international trade
atikah Reply
to aid productivity and efficiency, for economic growth, to help reduce dependence on local product
kunle
can someone please help differentiate between short and long run in microeconomics and macroeconomics
kunle
what is inflation in economic
Christopher Reply
a general increase price level and fall in purchasing value of money
a general increase in price level and fall in purchasing value of money
due to high supply of mony in the market the demand of goods will increase and price will high its call inflation.
Thalay
thanks
Christopher
how to calculate real and calculated unemployment rate for false information
James Reply
I think unemployment can't be calculated but I think due to economics survey that happens every year we come to know about unemployment rate and compares that with precocious year unemployment rate
are foreigners in our country helping our economy or not?
Nwabali Reply
foreign countries invest in India by two ways one for there business promotion(of their product ) through employment which employment generates in India and the 2nd is foreign aid fund means when a country suffers from flood,earthquake etc so other countries help them financial(called foreign aid)
simple answer is yes
Yes, this is through the investment as investors.
jossy
what is revenue commission?
Kelvyn Reply
is the organ which is collect tax from society for public servise
ABIYOT
Where is determination of price is done?
Vidhan Reply
when price equal with marginal cost
ABIYOT
what is demand
Fransis Reply
The willingness and ability to of a buyer to purchase a commodity
Moses
the thing that u r able to buy and which fullfill your want is called Demand
Stanzin
what u want to buy to fulfilling of yours desires is called demand
Thalay
explain manetary policy
Amina Reply
why SA is used in estimating of national income
Unique Reply
first what SA stand for?
Alhassan
SA stand for static adjustment
Unique
machenism of monetary expansion
EFAT
norther one
Unique
explain manetary policy
Amina

Get the best Macroeconomics course in your pocket!





Source:  OpenStax, Macroeconomics. OpenStax CNX. Jun 16, 2014 Download for free at http://legacy.cnx.org/content/col11626/1.10
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Macroeconomics' conversation and receive update notifications?

Ask