The unemployment rate measures the percentage of people who do not have jobs and are actively seeking work. It is a key statistic used in economic forecasting and used by governments to shape monetary policy and strategic economic decisions. The main causes of unemployment include recessions, depressions, technological improvements, job outsourcing, and voluntarily leaving one job for another. Structural unemployment can also occur when the economy permanently shifts away from certain types of skills.
Each month the Bureau of Labor Statistics (BLS) in the United States releases the number of employed and unemployed persons. This data is gathered through household labor force surveys and is used to calculate the national unemployment rate. The survey data can be compared with other countries’ unemployment data to provide a snapshot of the employment situation in different economies.
It is important to note when discussing unemployment rates that there are many nuances and complexities that can affect the data. For example, not all countries use the same definition of who counts as being in the labor force. This can cause apples-to-apples comparisons to be difficult, particularly when looking at different time periods or comparing unemployment rates over time.
In addition, seasonal fluctuations can affect total employment and unemployment data. For example, unemployment tends to rise in January and February due to weather constraints that limit the number of workers needed for agriculture, construction, and other seasonal industries. Similarly, both employment and unemployment tend to rise in June as students enter the labor force in search of summer jobs. Finally, the most commonly reported unemployment statistic—U-3—excludes people who have dropped out of the labor force or are working part-time because they cannot find full-time work. Other disaggregated metrics, such as U-1 through U-6, help to provide a more complete picture of the labor market.
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