To compute the unemployment rate, the first step is to place people into one of three categories: employed, unemployed, or out of the labor force. People who are employed are currently working. People who are unemployed are not currently working, but are actively searching for a job and would work if they found a job. People who are out of the labor force are either not currently looking for a job or would not work if they found a job. Once people have been placed into the appropriate categories, the total labor force can be calculated as the total number of workers who are either employed or unemployed. The unemployment rate is the ratio of the number of people unemployed over the total number of people in the labor force. For example, let's say that a survey by the BLS reveals 20 people employed, 5 people unemployed, and 40 people out of the labor force. Then the labor force would be the
This is the end of the preview. Sign up
access the rest of the document.