people in the labor force who are actively seeking work
the labor force consists of the employed and the unemployed.
the labor force is the population of people over age 16 who are looking for work or who are working.
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Issues surrounding unemployment rates
different groups within the economy experience vastly different rates of unemployment. the groups may be age cohorts or race or ethnic categories.
*people who were looking for work but gave up because they didn’t succeed in finding a job. the unemployment rate greatly underestimates this number.
**people who are working part time but would like to work full time, or who hold a job that requires a lower skill level than they possess. these people are considered employed, but they could be more productive in a different job.
types of unemployment
people who are not working because firms do not need their labor due to a lack of demand or a downturn in the business cycle.
an elevated level of unemployment that is expected to occur at certain parts of the year
people who are temporarily between jobs. they may be waiting for the best opportunity or they may have quit one job* to look for another.
*note that it's usually best to already have another job lined up before you quit your current job.
mismatches between job seekers and job openings, typically because job seekers do not have the appropriate necessary skills .
see chart below
created by colleen davenport [email protected]
when there is no cyclical unemployment, we have reached the natural rate of unemployment and the economy is operating at full employment.
there will always be frictional and structural unemployment present in the economy.
but we can achieve "full employment."
this is about 4% unemployment.