Unemployment rate definition
The unemployment rate is used to measure the number of people in a country or sector who do not have a job but are actively seeking one. The unemployment rate is measured as a percentage of the labor force, which consist of all people both employed and unemployed.
The unemployment rate is often viewed as a measure of the country’s spare labor force and unused resources. It can be affected by seasonal changes in economic activity such as harvesting and tourism or anomalies like a recession.
Does unemployment rate indicate economic health?
The annual or monthly change in unemployment is seen as an indication of the country’s current economic health. If the unemployment rate goes down, the economy is likely in a bull market with more jobs available to citizens and more citizens gaining income to fuel consumer spending. If the unemployment rate goes up, the reverse is likely to occur, and the economy may enter a bear market.