Natural unemployment rate : Economic health :: Cyclical unemployment rate : ?

The natural unemployment rate is the level of unemployment that exists when the economy is healthy and stable. It includes people who are between jobs or just entering the workforce, but it does not include those who are unemployed due to economic downturns. Similarly, cyclical unemployment is the type of unemployment that occurs when there is a downturn in the economy, such as during a recession. Therefore, just as the natural unemployment rate relates to economic health, cyclical unemployment relates to economic downturns. For example, during a recession, many businesses may close or cut back on hiring, leading to higher cyclical unemployment as people lose their jobs due to the poor economy.