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Unemployment Rate

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UNEMPLOYMENT RATE

Unemployment Rate

Unemployment Rate

The unemployment rate is the percentage of the labor force that is unemployed. To determine the unemployment rate, a survey is given out and two questions are asked. The first question is did you work for pay in the prior week? The other question is did you look for work in the prior month? If you answered no to both questions you are considered unemployed. If you answer yes to question one then you are considered employed. If you answer no to question one and yes to question two then you are considered unemployed.

To compute the unemployment rate use the following example. Let's pretend that there are 32 people unemployed and 100 people in the work force. The unemployment rate would be 3.125. This was calculated by dividing 32/100 =3.125 as the unemployment rate. A recent real world example is the unemployment rate of March in 2009. The unemployment rate is 13,161 and the civilian labor force is 154,048 according to the Bureau of Labor and Statistics. The unemployment rate ended up being 8.5 as of March 2009. (Government) There are other forms of unemployment. Cyclical Unemployment occurs when the unemployment rate moves in the opposite direction as the GDP growth rate. So when GDP growth is small (or negative) unemployment is high. (Government, 2009) Structural Unemployment is when an unskilled worker like a person who puts tires on a car for living losses his job. His job is replaced by a machine that does the job much faster. The outcome is he loses his job because he is not qualified to do his job anymore.

It has been worst year for US unemployment since the Second World War. The economy is not doing too well and this affects everybody. Last year the unemployment rate reached its highest point since the Second World War. Going from 7.2 to a 7.6 the unemployment rate has left a huge amount of people in the labor force without their jobs and it's still rising in an alarming rate. “December's total took total US job losses for 2008 to 2.589 million - the worst unemployment number since 1945.” Employers have taken the tough step to let part of the staff go until this national crisis gets better.

President Barack Obama recognizes the tough economic situation the country is going through, says he is trying to take some steps to approach it. “He urged the Congress to quickly approve his \$800 billion program designed to stimulate the economy.” While this happens the congress approves the money to stimulate the economy more people are losing their jobs, the auto industry cut 21, 400 jobs and “the service industry, which includes shops and banks, lost 273,000 jobs.” This year started with pretty bad number in the jobs front, but hopefully by the end of this year we will be looking at better numbers in the unemployment rate, hopefully.

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