Do these 3 things before closing this tab:
1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsThe unemployment rate measures joblessness among people in the labor force; the labor-force participation rate measures the share of the civilian noninstitutional population age 16 and older who are working or actively seeking work. Because they use different denominators, the rates answer different questions and can move in different directions. These definitions apply to U.S. Current Population Survey (CPS) statistics.
How the two rates differ
The U.S. Bureau of Labor Statistics (BLS) classifies people in the CPS as employed, unemployed, or not in the labor force. The labor force consists of employed and unemployed people. The unemployment rate looks only within that labor force; participation compares the labor force with a broader population.
| # | Preview | Product | Price | |
|---|---|---|---|---|
| 1 |
|
Principles of Economics | $271.07 | Buy on Amazon |
| 2 |
|
Basic Economics: A Common Sense Guide to the Economy | $24.91 | Buy on Amazon |
| 3 |
|
Economics For Dummies: Book + Chapter Quizzes Online | $17.49 | Buy on Amazon |
| 4 |
|
Principles of Economics | $138.99 | Buy on Amazon |
| 5 |
|
Understanding Economics, Student Edition (ECONOMICS PRINCIPLES & PRACTIC) | $48.98 | Buy on Amazon |
As an Amazon Associate I earn from qualifying purchases.
| Measure | Numerator | Denominator | Question it answers |
|---|---|---|---|
| Unemployment rate (U-3) | People classified as unemployed | Civilian labor force: employed plus unemployed | Among people in the labor force, what share is unemployed? |
| Labor-force participation rate | Civilian labor force: employed plus unemployed | Civilian noninstitutional population age 16 and older | What share of this population is working or actively seeking work? |
| Employment-population ratio | Employed people | Civilian noninstitutional population age 16 and older | What share of this population is working? |
| U-6 | Unemployed people, marginally attached people, and people working part time for economic reasons | Labor force plus marginally attached people | How broad is labor underutilization under BLS’s broadest headline alternative? |
The BLS calls U-3 the official unemployment rate. Its CPS definitions define the participation rate as the labor force as a percentage of the civilian noninstitutional population. The BLS explanation of how unemployment is measured describes the related classifications and measures.
Quick wins for a faster PC:
Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Who counts as unemployed in the CPS?
Not working does not, on its own, make someone unemployed under the official measure. Generally, a person must have had no employment during the survey’s reference week, been available to work, and made a specific effort to find a job during the four weeks ending with that week. A person temporarily laid off and expecting recall can qualify without actively searching.
#1 Best Overall
Employment includes qualifying paid work, self-employment, certain unpaid family work, and temporary absence from a job or business. People who meet neither the CPS definition of employed nor unemployed are counted as not in the labor force. They remain in the participation-rate population denominator but are not included in the unemployment-rate denominator.
People who want a job but are not currently searching
Someone who wants work but has not searched recently may be outside the labor force, rather than officially unemployed. Discouraged workers are a subset of people outside the labor force: they want and are available for work, have searched during the past year, but are not currently looking because they believe no jobs are available. The BLS Employment Situation quick guide explains this survey context.
Rank #2
How to read the rates together
A falling unemployment rate can mean jobless people found work. But it can also fall if people who are unemployed stop actively looking and therefore leave the labor force. In that case, they are no longer counted in the unemployment-rate denominator or numerator, even though they have not found jobs. A change in participation can provide context for interpreting the unemployment rate, but the two rates alone do not establish why either one changed.
Recommended Free Tools
The employment-population ratio adds a third perspective: it measures the share of the same population that is employed, rather than employed or seeking work. It can help distinguish labor-force engagement from the share actually working, though it also does not explain the cause of a change by itself.
Rank #3
What U-6 adds—and what it does not
U-6 is a broader measure of labor underutilization, not another name for the participation rate. BLS publishes alternative measures U-1 through U-6: U-4 adds discouraged workers to U-3, U-5 adds other marginally attached workers, and U-6 additionally includes people working part time for economic reasons. U-6 therefore includes people not captured by the official unemployment rate, while participation measures labor-force engagement relative to the population. See the BLS definitions of alternative labor-underutilization measures.
Quick Recap
Rank #4
Scope and comparison cautions
- These definitions are for U.S. CPS statistics covering the civilian noninstitutional population age 16 and older. That population excludes active-duty Armed Forces members and people living in institutions, including correctional and residential-care facilities.
- Other countries may use different definitions, so cross-country comparisons require checking each national statistical agency’s methods.
- When comparing U.S. rates over time, use the same population group and the same seasonal-adjustment treatment. BLS publishes seasonally adjusted and not-seasonally-adjusted series.
- For a current rate, consult the dated BLS Employment Situation release and identify whether the figure is seasonally adjusted. The formulas above define measures; they are not readings for a particular month.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
