Unemployment Rate
The unemployment rate is the percentage of people in the labor force who are without a job but are available for work and actively looking for one.
In the US, the Bureau of Labor Statistics publishes the unemployment rate monthly in the Employment Situation report, usually on the first Friday of the month, based on a survey of about 60,000 households. People who are not looking for work, such as retirees or students, are not counted in the labor force.
The standard measure is called U-3. A broader measure, U-6, also counts discouraged workers and people working part-time who want full-time jobs. The labor force participation rate shows what share of the working-age population is employed or looking for work.
Unemployment is a key input for the Federal Reserve, whose mandate includes maximum employment. A low rate signals a strong job market but can add to wage and inflation pressure; a rising rate can be an early sign of recession.
Example: if 160 million people are in the labor force and 6.4 million of them are unemployed and searching, the unemployment rate is 4%.