Econ: Measuring Employment

The national civilian unemployment rate and the national employment rate are the two most important means we use to measure how well we are achieving the goal of full employment. The unemployment rate is derived from a national survey of about 60,000 households conducted each month, which asks about the employment status of people aged 16 or older. The number of people at work or looking for work can be estimated very accurately from the survey data. Those people who are at work (the employed) plus those people who are looking for work (the unemployed) make up the labor force. (The labor force is much smaller than the total population, since many individuals are too young or too old to work, some people are unable to work, and some choose not to work.) The percentage of the total labor force that is out of work is computed by dividing the number of people looking for work (the unemployed) by the total labor force and multiplying the result by 100, as follows:

Unemployment Rate Formula

The civilian employment rate is determined by taking the number of civilians 16 years of age and older—these data come from the monthly survey of 60,000 households—and dividing it by the number of persons 16 years of age and older in the noninstitutional population of the United States. (NOTE: The noninstitutional population includes all persons 16 years of age and older who are not inmates of penal or mental institutions, sanitariums, or homes for the aged, infirm, or needy, nor members of the armed forces stationed in the United States.)

Employment Rate Formula




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