Economics

How do you calculate the unemployment rate?

The unemployment rate is the percentage of a country’s labor force that is unemployed but seeking employment. The unemployment rate is published each month by the Bureau of Labor Statistics (BLS) in the nonfarm payrolls report. The numerator of the unemployment rate is the number of unemployed persons, while the denominator is the number of people in the workforce.

How might the unemployment rate overstate the amount of joblessness?

The nemployment rate may overstate the amount of joblessness because someone who is considered unemployed and is not actively trying to find work will be counted. Also, unreported legal employment and unreported illegal employment may be included in the unemployment rate.

Which economic indicator measures inflation?

The consumer price index (CPI) is a standard measure of consumer goods price inflation. CPI measures the average monthly change for a basket of goods and services bought by consumers.

Components of CPI include food, transportation, shelter, utilities, clothing, medical care, and entertainment. As the cost of the basket of goods in the index increases, CPI increases. Inflation is the percentage change in the CPI from one period to the next.