How to Calculate the Unemployment Rate
The unemployment rate expresses the share of the labor force that is currently without work but actively seeking employment. Governments and analysts track this figure to gauge economic health because it shows how many able workers cannot find paid jobs despite looking. To compute the rate, divide the number of unemployed persons by the total labor force (employed plus unemployed) and multiply by 100.
Labor force surveys and payroll data feed into this calculation. The labor force excludes retired people, full-time students who are not looking for work, and discouraged workers who have stopped searching. When reporting the unemployment rate, agencies double-check that the unemployed count does not exceed the measured labor force and that seasonal shifts are accounted for.
Unemployment Rate Calculator
Illustrative example
Using realistic survey data, suppose 7.5 million people are actively unemployed while the overall labor force totals 165 million. Plugging those figures into the formula yields 7.5 รท 165 = 0.0455, so the unemployment rate equals 4.55%. Analysts interpret changes in this percentage along with participation trends and payroll revisions.
For more detailed assessments, compare the headline unemployment rate with the employment-population ratio and the underemployment rate to understand whether workers are underutilized or discouraged.