Unemployment Rate

Unemployment Rate

February 12, 2017

The unemployment rate: the % of people who want a job but are not are working
labor force: unemployed and the employed
employed: 1 hour a month
temporarily absent from work
part time workers

Who is not in the labor force

Kids
full time students
military
discouraged
people who are incarcerated
retiree's
house wife/husband

Formula employment rate

# unemployed/ labor force x 100

4% to 5% anything higher than 5% would be bad

Four types of unemployment

1.Frictional unemployment
temporarily unemployed or being between jobs
individuals are qualified workers with transferable skills but are not working

2. Seasonal employment
This is a specific type of frictional unemployment which is due to the time of year and nature of the job
These jobs will be coming back

3. Structural unemployment
changes in the structure of the labor force make some skill absolute. Workers do not have transferable skills and these jobs will never be able to come back
Workers must learn new skills to be able to get a new job

4. Cyclical unemployment
Unemployment that results from economic downturns as demands for goods and services fall, demand for labor falls and workers are fined.

The natural rate and full employment
two of the three types of unemployment are unavoidable
frictional
structural

Together they make up the natural rate of unemployment (NRU)
We are at full employment if we have only the natural rate of employment.
full employment means no Cyclical unemployment
economist generally agree that an unemployment rate of around four to 6% full employment
4-5% unemployment=NRU

VIDEO ABOVE IS A REVIEW OVER THE NOTES TAKEN IN THIS POST NOTES