The unemployment rate is a key economic indicator that tracks the number of people without jobs. It is usually measured by dividing the number of unemployed individuals by the total working-age population. It is also commonly expressed as a percentage.
The higher the unemployment rate, the weaker the economy. Unemployment can be caused by many factors, including business cycles, government policies, and natural disasters. However, most often it is a result of a mismatch between the number of people who want to work and the number of jobs available.
A high unemployment rate can lead to a number of negative effects, from increasing public discontent and political tension to stunting economic growth. It is therefore important to monitor it closely.
Despite the importance of the jobless rate, it can be difficult to determine its true meaning and impact. One big reason is that countries use different definitions of unemployment, making comparisons between them difficult. For example, some count everyone who wants to work as unemployed, while others only consider people who are actively looking for jobs. Then there is the fact that some countries report their unemployment rates with long lags, sometimes up to a year.
In the United States, the Bureau of Labor Statistics releases monthly data on unemployment, based on a survey of households. The survey questions are asked about whether or not a person is out of work and looking for a job. There are several different measures of unemployment, with U-3 being the most familiar, which only looks at out-of-work Americans who have been looking for work within the last four weeks. The broader measure of unemployment, U-6, includes those who have been out of work for 15 weeks or more and those who are discouraged in their search for jobs.