Unemployment rate

User Generated

DhrraT6

Economics

Question Description

How is the unemployment rate calculated? Where does the BLS get the data they use to calculate the unemployment rate?

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Explanation & Answer

First, calculate U: The sum of frictional, structural, and cyclical unemployment. 
U = 20 + 35 + 60 =115 
Discouraged workers are not counted as part of the labor force. 

Second, calculate CLF: The sum of total employment and total unemployment. 
CLF = 115 + 10 + 410 = 535 
Underemployed workers get counted as part of the labor force. 

Thrid, calculate u: U/CLF. 
u = 115/535 = 0.215 = 21.5%

fbovn (165)
New York University

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