The unemployment rate is an important metric that measures how many people are unemployed as a percentage of the labor force. It is a crucial factor in setting monetary policy and making strategic economic decisions. The unemployment rate is based on two surveys conducted by the Bureau of Labor Statistics (BLS), which is part of the U.S. Department of Labor. The first, the Establishment Survey, asks a sample of employers how many people they have on their payroll. The second, the Current Population Survey, or CPS, involves interviewing a randomly selected sample of households. In addition to asking about people’s employment status, the survey also asks whether they are looking for work.
There are several ways to measure unemployment, but the most commonly used is the U-3 figure. It includes people who are unemployed, discouraged workers, and marginally attached to the labor force (people who want full-time jobs but have been unable to find one). The more comprehensive measure is U-6, which adds in underutilized workers, or those who want to work full time but have to accept part-time work for economic reasons.
Regardless of how it is measured, unemployment has a negative impact on the health of individuals and families. For example, individuals are less likely to save and invest money while unemployed and experience decreased quality of life compared to those who are employed. Furthermore, family stability is lower in households with parents who have experienced job loss. Finally, research shows that black, Hispanic and female workers are more prone to experiencing functional unemployment than white or male workers.