Unemployment rate is a measure of labor underutilization, which is an economic concern because high unemployment can lead to social unrest, depress economic growth, and depress living standards. Unemployment rates are calculated by dividing the number of jobless people by the total civilian noninstitutional population 16 years and over. The term labor force is defined as the sum of those who are employed and those who are seeking employment, but are not in prison or on welfare. Unemployed people who are not in the labor force include students and homemakers, as well as discouraged workers (people who have stopped looking for work).
Various measures of unemployment exist, including the official U-3 measure published by the Bureau of Labor Statistics, which excludes discouraged workers. Other measures include the longer-term U-5 and the more comprehensive U-6. The latter includes discouraged workers as well as marginally attached and involuntary part-time workers who want full-time jobs and have had to settle for part-time hours, and slackemployed people (people whose job search has been going on for so long that they have become discouraged).
Other indicators of labor market conditions, such as the employment-to-population ratio, also track trends over time. EPI monitors these indicators and tracks them in a graph on Economy Track, our companion website.
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