Ch06_macro

Ch06_macro - Chapter 6: Monitoring Jobs and the Price Level...

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Chapter 6: Monitoring Jobs and the Price Level Objectives: Define the unemployment rate, the labor force participation rate, the employment-to-population ratio, and aggregate hours Describe the sources of unemployment, its duration, the groups most affected by it, and how it fluctuates over the business cycle Explain how we measure the price level and the inflation rate using the CPI
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Jobs and Wages Population Survey The U.S. Census Bureau conducts a monthly population survey (60,000 households) to determine the status of the U.S. labor force. The population is divided into two groups: 1. The working-age population —the number of people aged 16 years and older who are not in jail, hospital, or some other institution 2. People too young to work (under 16 years of age) or in institutional care
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Jobs and Wages The working-age population is divided into two groups: 1. People in the labor force 2. People not in the labor force The labor force is the sum of employed and unemployed workers.
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Jobs and Wages To be counted as unemployed, a person must be in one of the following three categories: 1. Without work but has made specific efforts to find a job within the previous four weeks 2. Waiting to be called back to a job from which he or she has been laid off 3. Waiting to start a new job within 30 days
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Jobs and Wages Figure 6.1 : 2006 Population: 299.3M Working-age: 228.7M Labor Force: 152.6M Employed: 145.3M Unemployed: 7.3M
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Jobs and Wages Three Labor Market Indicators calculated by the census Bureau The unemployment rate The labor force participation rate The employment-to-population ratio
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Jobs and Wages The Unemployment Rate The unemployment rate is the percentage of the labor force that is unemployed. The unemployment rate is (Number of people unemployed ÷ labor force) × 100. The unemployment rate reaches its peaks during recessions.
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Jobs and Wages The Labor Force Participation Rate The labor force participation rate is the percentage of the working-age population who are members of the labor force. The labor force participation rate is (Labor force ÷ Working-age population) × 100. In 2006, the labor force was 152.6 million and the working-age population was 228.7 million. The labor force participation rate was 67.6 percent.
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Jobs and Wages The labor force participation rate falls during recessions as discouraged workers —people available and willing to work but who have not made an effort to find work within the last four weeks—leave the labor force.
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Jobs and Wages The Employment-to-Population Ratio The employment-to-populatio n ratio is the percentage of working-age people who have jobs. The employment-to-population ratio equals (Number of people employed ÷ Working-age population) × 100. In 2006, the number of people employed was 145.3
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Ch06_macro - Chapter 6: Monitoring Jobs and the Price Level...

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