The unemployment rate is one of the most closely watched economic indicators. While it may not capture every aspect of the labor market, it is widely viewed as a proxy for a nation’s ability to hire and keep people employed. Other indicators, like the labor force participation rate (LFPR) and employment-to-population ratio (EPOP), are also important, but the unemployment number gives a snapshot of the health of the civilian workforce and the economy in general.
The Bureau of Labor Statistics (BLS) releases monthly reports on employment and unemployment statistics based on a national survey, called the Current Population Survey (CPS). There are several different measures of unemployment, including the headline unemployment rate and more detailed characterizations based on duration of unemployment, sector of the economy, urban vs. rural location, race or ethnicity, and level of education. Data are available in a variety of formats and broken down by state, industry, region, gender, age, and more.
There are many reasons why unemployment varies over time and across places. Some of these are short-term and can be attributed to shifts in the supply of labor or changes in wages, while others are long-term, structural, and related to demographic trends and institutions. In the longer term, a decline in unemployment is associated with higher economic growth and productivity.
Unemployment has significant impacts on the well-being of families. It can lead to financial hardship and stress, which can affect family stability and children’s outcomes. In particular, children of unemployed parents are more likely to experience instability in their lives as adults and less likely to have jobs that provide living wages.