The Unemployment Rate: Get Real

This is a great article from Investopedia via Finance.Yahoo.com that explains how the unemployment is really calculated and what the numbers mean. One of the keys to the unemployment rate is the U-6 number – people who are underemployed.  For many people, understanding these numbers is a very eye-opening experience.

The Unemployment Rate: Get Real

 The national unemployment rate is defined as the percentage of unemployed workers in the total labor force. It is widely recognized as a key indicator of labor market performance. A closely-watched economic indicator, the unemployment rate attracts a great deal of media attention, especially during recessions and tough economic times.

Why Does the Unemployment Rate Matter?
As the U.S. Bureau of Labor Statistics (BLS) notes, when workers are unemployed, their families lose wages, while the nation as a whole loses its contribution to the economy in terms of the goods or services that could have been produced. Unemployed workers also lose their purchasing power, which can lead to unemployment for other workers, creating a cascading effect that ripples through the economy.

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