Unemployment rate
Definition
The unemployment rate is the percentage of the labor force that is currently unemployed and actively seeking employment.
Analogy
Imagine a pizza party where there are 100 slices of pizza available. If 5 people at the party don't have a slice of pizza and are actively looking for one, then the unemployment rate would be 5%.
Related terms
Labor force participation rate: This term refers to the percentage of the working-age population that is either employed or actively seeking employment.
Frictional unemployment: This term refers to temporary unemployment that occurs when individuals are transitioning between jobs or entering the workforce for the first time.
Structural unemployment: This term refers to long-term unemployment caused by a mismatch between available jobs and workers' skills or location.
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