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Calculation and Use of the Unemployment Rate

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Describe the relevant criteria that government statisticians use to determine whether a person is "unemployed."

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Solution Summary

Relevant criteria that government use to determine whether a person is "unemployed." How unemployment data are gathered and problems with its use as an economic indicator.

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People who aren't employed can be either unemployed or not within the labor force. Those too young or too old to work are not considered part of the labor force, and thus are not considered unemployed. The government considers only those actively looking for work as unemployed. If a person has sought employment in the last four weeks they are considered unemployed. Anyone waiting to be recalled to a job from which they were laid off is also unemployed.

Statistics are based on taking a sample and using it ...

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