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Unemployment

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Unemployment

Definition of Unemployment

The unemployment rate is the percentage of the US labor force that is unemployed. It is calculated by dividing the number of unemployed individuals by the sum of the number of people unemployed and employed. An individual is counted as unemployed if they are over the age of 16 and actively looking for a job, but cannot find one. Students, who choose not to work, and retirees, are not counted in the unemployment rate.

In March 2001:

Description

Total civilian population 211,171,000(Excluding those under 16, members of the military, and persons in institutions)

- Not in Labor force 69,304,000 (Retired, students, individuals choosing not to work)= Labor force 141,868,000 (Total population minus those not in labor force)- Employed 135,780,000 (Individuals with jobs)= Unemploye 6,088,000 (Individuals without a job and actively searching)

Unemployment Rate =6,088,000

135,780,000 + 6,088,000 = 4.3%

The unemployment rate for the month of March 2001 was 4.3 percent, a tenth of a point increase from the January and February 2001 rate of 4.2%. The number of individuals employed decreased by 86,000.

An unemployment rate of 4.3 percent for March 2001 is the highest unemployment rate since July 1999, but only slightly higher than the 3.9 to 4.1 percent range from October 1999 to the end of 2000. Prior to that, the unemployment rate had been in a steady decline since shortly after the last recession in 1990-1991. The average monthly increase in employment was approximately 155,000 in 2000 and 220,000 in 1999. For almost ten years, unemployment has fallen and the number of employed persons has increased by more than 15 million.

In March 2001, the number of jobs decreased by 86,000, the largest monthly decrease since 1991. Job losses were most prominent in the manufacturing sector (81,000 jobs), but there were also losses in the retail trade sector (46,000 jobs). These losses were partially offset by employment increases experienced in the construction and finance sectors.

Growth in employment in 2000 was 1.9 million; in 1999, the increase in employment equaled 2.8 million.

Changes

For most of 2000, unemployment remained between 3.9 and 4.1 percent of the labor force. In the first three-quarters of 2000, the numbers of individuals in the labor force were i...

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...te of growth in real GDP increased to 3.9, with the last three years being over 4.3 percent per year. A five percent increase from 1999 to 2000 is the highest level of yearly increase since 1984.

The recent upward trend (until the last two quarters) in economic growth has been accompanied by increases in the rates of growth of consumption spending, investment spending and exports. Productivity increases; decreases in unemployment, expansion in the labor force, and increases in the amount of capital have allowed real GDP to grow at faster rates. Yet during this same time period, consumers have reduced their savings.

Conclusion

After reviewing the unemployment, inflation and the GDP history of the last decade it is obvious why the United States economy has been ranked number one in the world. The economy has averaged a 5% or less unemployment rate, a 3.5% or less inflation rate and a GDP rate that has fluctuated from 2.2% to 5% throughout the nineties. The future outlook of the next decade is promising, however, many economists are skeptical when asked if this trend can continue at its current rate.

References

www.econedlink.org

www.economicsameria.org
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