EXAMPLE 3 Measuring unemployment

Each month the Bureau of Labor Statistics (BLS) announces the unemployment rate for the previous month. People who are not available for work (retired people, for example, or students who do not want to work while in school) should not be counted as unemployed just because they don’t have a job. To be unemployed, a person must first be in the labor force. That is, the person must be available for work and looking for work. The unemployment rate is

To complete the exact definition of the unemployment rate, the BLS has very detailed descriptions of what it means to be “in the labor force” and what it means to be “employed.” For example, if you are on strike but expect to return to the same job, you count as employed. If you are not working and did not look for work in the last two weeks, you are not in the labor force. So, people who say they want to work but are too discouraged to keep looking for a job don’t count as unemployed. The details matter. The official unemployment rate would be different if the government were to use a different definition of unemployment.