Primer on the Unemployment Rate

Have you ever wondered how the unemployment rate is calculated? This video explains how the ratio is derived.

It’s based on the number of adults in the U.S. population who are working or actively looking for work. It’s literally the number of unemployed over the number of those in the labor force.

Actively looking for work means you’ve been looking for a job some time over the last four weeks. If you’ve gotten so discouraged that you’ve stopped looking for work, you are no longer considered part of the labor force and so are not included in the unemployment rate. Ironically, that would make the unemployment rate go down.

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About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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