Unemployment rate

The unemployment rate is the percentage of people in the labor force who do not currently have a job but are actively looking for one and available to work. People without a job who are not looking are excluded from the labor force entirely, and so are not counted as unemployed at all.

The formula is unemployment rate = unemployed / labor force, where the labor force equals employed plus unemployed people. Statistical agencies typically publish several variants with different eligibility and discouragement criteria, for example the U.S. Bureau of Labor Statistics publishes measures U-1 through U-6, with the headline figure being a narrower definition and U-6 adding discouraged and underemployed workers. This differs from the labor force participation rate, which describes how many people are in the labor force at all, not how many of them lack a job.

It is one of the most closely watched economic and political indicators, used to gauge labor-market health and to inform monetary and fiscal policy, and it is reported alongside measures such as the gini coefficient and figures drawn from the American Community Survey. A common misreading is treating a falling headline rate as unambiguous good news: because the denominator excludes people who have stopped looking for work, the rate can fall even when overall employment does not meaningfully improve, if discouraged workers exit the labor force instead of finding jobs.