Open blog #4: Unemployment Rate

Because I mention the Unemployment Rate in the Prompt blog, I think right now is a good choice for me to introduce this definition in my open blog.

First, some background information. The date which is used to calculate the unemployment rate is collected from The Bureau of Labor Statistics uses the Current Population Survey (often referred to as the household survey). This is a monthly survey of about 60,000 households. They define that “Employed” is the person who is working or temporarily away (in last week) and part-time counts. “Unemployed” is the person who is not working but available and actively looking (in last four weeks). This definition is tricky that unemployed does not just mean not working! Labor Force is mean Employed add Unemployed.

Unemployment Rate is (Unemployed/Labor Force) x 100.

Let’s come back for the Trump speech which I mention in my prompt blog # 5 that he think the “real unemployment rate” is nearly 40 percent. How he got the result?

As the picture I showed above. If we take everyone in the “working age population” who is not working, you would get 40%. But that would include as unemployed, for example, 16-year-old high school students, 80-year-old retirees, parents who have chosen to stay home, the disabled…

So again, Trump’s speech make no sense. 

Click here for more information:
https://www.youtube.com/watch?v=WI2UztDjQhQ

Citation:

Mankiw, Brief Principles of Macroeconomics, 7th edition