How would you define and explain the actual unemployment rate of the American economy in light...

How would you define and explain the actual unemployment rate of the American economy in light of the different types of unemployment you studied?

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Expert Solution

Unemployment rate means the percentage of total labor force that is jobless. This rate changes with changes in economic conditions. Like when economy is down, jobs are scarce, so unemployment would increase and when economy is growing, jobs are plentiful so unemployment rate is expected to fall.

In US, the Bureau of Labor releases U-3 rate as a part its monthly employment report. This U-3 rate is commonly used in the nation to measure unemployment. U-6 is also an alternative, this includes the workers who have stopped looking for new jobs due to discouragement and the workers who work part time as they aren't getting full time jobs. But the official unemployment rate is U-3 . It includes the people who are willing to work and have actively searched for jobs in past four weeks, still haven't got job. The calculation for this unemployment rate is done by dividing the number of unemployed by the number of people in labor force ( which includes both employed and unemployed )

Among these measures, the U-3 is the official and most common measure used for unemployment in US .

Rahul Sunny answered 2 years ago

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