Overview
Calculating the unemployment rate is essential for understanding the health of an economy. It reflects the percentage of the labor force that is unemployed and actively seeking work. By analyzing this rate, policymakers and economists can gauge economic performance and make informed decisions regard...
Key Terms
Example: The labor force includes both workers and job seekers.
Example: A person who has been laid off and is applying for new jobs is considered unemployed.
Example: If 90 out of 100 people in the labor force are employed, the employment rate is 90%.
Example: The unemployment rate is a key economic indicator used to gauge economic health.
Example: During a recession, many companies lay off workers, leading to cyclical unemployment.
Example: Workers in declining industries may face structural unemployment if they lack skills for new jobs.