I need to understand the unemployment rate for example. If it 7.5 % or 4% The higher the number the more?

Question

people are looking for jobs or don't have one. Can someone explain this to me. Why do some places have higher numbers while others are lower. I'm just turn 19. I just like to know since I'm about to look for work. Some my friends tell me don't worry about. I heard it on the news a lot when they talk about the business news it much be important for people to know. Is I'm wasting my time to know what number the unemployment rate somebody please explain this to me in plain English.

Answer 1

To add to the previous poster, Unemployment should only include those people seeking employment and cannot find it. Not people are unemployed. Because a segment of the population would skew the results. For instance, wealthy people who don't need to work would end up being counted as unemployed and skewing the numbers..

Answer 2

Unemployment rates are how many people are currently receiving unemployment compensation at any given time.  The rates do not include persons who have had their unemployment insurance run out or are not working and didn't qualify.

If the rate is 5%, that means out of a population of 100 people, 5 people would be collecting unemployment insurance due to losing their jobs.  In all actuality it could be 10 or 15 people out of the 100 who are currently unemployed and wanting to work as the rates don't count them.

Answer 3

The unemployment rate is based on the number of people who file for unemployment.  One of the requirements for drawing unemployment is that you have to be actively looking for work, so the unemployment rate is, theoretically, a way of 'measuring' how many people are seeking work but are unemployed (the percentage of the local population that is "unemployed").  

These figures are collected and reported by the local unemployment agencies and then compounded into figures for the state and federal level, so you should be able to find the unemployment rate for any area.