Unemployment rate measures the percentage of workers who are out of work and looking for a job. It is a key indicator of the health of an economy, a country’s job market, and overall economic performance. The unemployment rate is based on monthly labour force surveys that include household members aged 15 and over. These surveys are a vital source of information on employment and are the primary basis for official statistics on unemployment, although other sources can be used to supplement these data.
There are a number of different ways to measure unemployment, but the Bureau of Labor Statistics (BLS) uses the Current Population Survey (CPS) to evaluate civilian unemployment in the United States. The BLS also tracks a variety of other labor market indicators that vary by age, educational attainment, race and ethnicity.
Historically, the U.S. has experienced high unemployment rates. These high levels of joblessness can be a sign of a troubled economy, as the loss of income reduces consumer spending and makes it harder for businesses to grow. It can also be a cause of social unrest and crime, which can further damage the economy.
In an effort to mitigate the effects of high unemployment, government agencies collect and publish a variety of information on jobless trends. Policymakers use these data to make decisions about monetary and fiscal policies that can affect the health of the economy and reduce unemployment. One of the most important pieces of employment data is the natural rate of unemployment, which economists describe as the average unemployment rate that would occur in the absence of any cyclical or structural changes to the economy.