Unemployment RateLooking at more than just the number….

How Is Unemployment Measured?

• The unemployment rate is calculated as the percentage of the labor force that is unemployed

Unemployment Rate = # unemployed

Labor force100

Labor Force = # people over 16 with jobs + # people looking for jobs

Calculating Unemployment

Adult Population(251 million)

Labor Force(157 million)

Employed(149.0 million)

Not in labor force(94.0 million)

Unemployed (8.0 million)

8.0/157 =

= 5.1%

# Unemployed----------------------- Labor Force

Analyzing more than just one number…

Great Recession

10.2%

5.1%On the surface, the unemployment number

looks very good, but……

62.6%

# Unemployed Workers----------------------------- = Unemployment Rate Size of Labor Force

Reading: Labor Force Participation

• Conclusions: falling labor force participation rates make the unemployment rate look significantly lower than it is

– One factor in why GDP is only growing at +2.0%

+ ---

Economy Today?Circular FlowPRODUCERS CONSUMERS

Factors

Products

Land, Labor & Capital

Circular FlowPRODUCERS CONSUMERS

Factors

Products

Land, Labor & Capital

2015

Boomerang Kids

• http://www.pbs.org/newshour/bb/business/jan-june12/makingsense_02-14.html

U.S. Business Cycle 1990 -2015

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2000

1990

’s T

echn

olog

y B

oom

2001

2006

Hou

sing

Bub

ble

2008-09

2015

Great R

ecession

Internet Stock C

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