Unemployment rate is an important economic indicator that reflects the state of the labor market. High unemployment is often a sign that the economy is struggling, and it can lead to other problems such as lower consumer spending. This can cause businesses to lay off workers, which leads to more unemployment. Historically, unemployment has been a volatile statistic and has changed dramatically across countries. Some economies have high rates of unemployment while others have low ones. In the United States, the rate fluctuated between 5.2 and 10.8 percent during the 1980s. It has hovered around 6 percent during the Bill Clinton and George W. Bush presidencies.

To determine the unemployment rate, the Bureau of Labor Statistics conducts interviews with people in the labor force. They are asked questions about their current employment status, and how long they have been jobless. They are also asked to list the methods they have used to find work. This includes visiting an employment agency or sending out resumes. It excludes passive job search activities such as attending a training course or scanning newspaper classified ads. The BLS publishes the results of these surveys monthly. The official unemployment rate, U-3, is based on this data. Other rates, such as U-5, which counts discouraged workers and those who want to work but have given up searching because they do not think jobs are available, are calculated separately.

While economists and policy makers continue to debate the causes and solutions for unemployment, most agree that it is a harmful phenomenon. It reduces a country’s economic productivity, and it can have lasting psychological effects on those who have lost their jobs. It also has a negative effect on the workers who are still employed, as they may feel guilty about having a job while their co-workers do not.