Why doesn't the US count people who are looking for work as unemployed? For example, the...

Why doesn't the US count people who are looking for work as unemployed? For example, the unemployment rate reported during the COVID-19 period, 14.7%, is lower than the real unemployment rate predicted by economists.

Expert Solution

The US does not count people who are looking for work as unemployed because, technically, they should be actively looking for a job currently.

There are many who are looking for a job but are not currently available for work and there are many who are looking for a job but not actively. Due to coronavirus pandemic, many people without any job have postponed their wish to start looking for a job until at least June 15.

The Labor Department publishes six measures of unemployment. The main one is technically called U-3, and to qualify one needs to be both out of work and looking for a job to be counted. People have got themselves locked to ensure they do not fall victim to coronavirus attack. Also, they responded to the complete lockdown announcement of the US government. Hence, they are neither the part of the labor force nor the part of the unemployed lot.

Thus, unemployment rate reported during the COVID-19 period, 14.7%, is lower than the real unemployment rate predicted by economists

Rahul Sunny answered 9 months ago

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