The unemployment rate is an economic statistic that indicates the percentage of workers who are jobless and seeking employment, excluding those who are neither employed nor looking for work. The rate is an important indicator of the health of the labor market and a key factor in setting monetary policy and making strategic economic decisions. It has also been a political flashpoint, reaching peaks during the early 1980s under President Ronald Reagan and again during the Great Recession of 2007-2009.

The official unemployment rate is computed from a government survey called the Current Population Survey, which includes people of working age who have been interviewed and asked about their status regarding employment. It excludes people who are either not looking for a job or who do not want to work for any reason (students, homemakers, etc). A more comprehensive measure of labor underutilization is the JOLTS series, which also considers those wishing to change their jobs but have not done so in the past four weeks.

Unemployment is influenced by many factors, including cyclical economic changes that lead to companies cutting back on expenses in a downturn or recession and reducing worker numbers, as well as social and political forces that affect the eagerness of job seekers or the willingness of businesses to hire. It is also affected by demographics, such as the aging of the baby boomers and their expected reduction in work force participation.

High unemployment rates reduce consumer spending, which has a direct impact on a nation’s ability to produce goods and services and thus can contribute to economic stagnation. They can also increase the burden on governments in terms of increased reliance on social welfare programs and lost tax revenues. And for individuals, losing a job can be a life-changing event that can have lasting effects on their relationships with family and friends.