Unemployment refers to people who want a job but do not have one.

People without jobs who are not looking for a job are not considered to be unemployed.

Adults in the U.S. can be placed in one of three categories:

The first two categories comprise what is known as the labor force:

Roughly two-thirds of the adult population in the U.S. are members of the labor force.


Unemployment is measured by the Bureau of Labor Statistics (BLS)

The Bureau of Labor Statistics performs a telephone survey to estimate the number of people in each of the above employment classifications.

If the phone survey, the primary question asked is:Do you have a job?

Are you looking for a job?

From these estimates, the Bureau of Labor Statistics calculates the unemployment rate:

Unemployment Rate = Number of Unemployed / Size of the Labor Force

Unemployment Rate = Number of Unemployed / (Number of Employed + Number of Unemployed)

How the government measures unemployment - a very detailed explanation from the Bureau of Labor Statistics


Yearly employment & unemployment data - since 1932 - national averages - from the Bureau of Labor Statistics (BLS)

Monthly unemployment data for the past 12 months - from the Bureau of Labor Statistics (BLS)

Other annual data on employment & earnings - from the Labor Force Statistics from the Current Population Survey by the Bureau of Labor Statistics (BLS)



Unemployment data, like all data, have limitations. The statistics reported by the Bureau of Labor Statistics are not perfect measures of unemployment in the United States.

The limitations of unemployment data include:

1. Misleading answers by some of those surveyed -

2. Underemployment - Some people counted as "employed" are "underemployed."

3. Discouraged workers - Some people may become discouraged by their inability to find a job and stop looking for one, even though they want one.


There are three major types of unemployment:


Most economists consider it natural (and perhaps even good) to have a certain amount of unemployment. Having a pool of people looking for jobs makes it easier for businesses to hire new workers. (If everyone who wanted a job had one, a business who wanted to hire more workers would have to lure them from other companies. This would probably mean the business would have to pay more to the workers. This might contribute to inflation.)

Consequently, attempts to reduce unemployment generally focus on cyclical or structural unemployment.

Structural unemployment might be reduced by:

Cyclical unemployment might be reduced by increasing aggregate demand in the economy.



Unemployment Rate

Labor Force


Discouraged Workers

Frictional Unemployment

Structural Unemployment

Cyclical Unemployment

Aggregate Demand


Obviously if you do not have a job (and you want one), then you care about unemployment.

Yet, everyone should want us to have low unemployment.

Keeping unemployment low is one of our macroeconomic objectives.

Macroeconomic policy goals include:

A Profile of the Working Poor, 1996 - from the Bureau of Labor Statistics, December 1997

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