Simone Assaley

Kassens

Macroeconomics

April 18, 2014

Unemployment

            Unemployment is a concept that has been widely misunderstood by the population.  When someone is considered unemployed, they have not been searching for work for over four weeks.  Anyone who is not in search of a job is not considered to be in the labor force, and will not be counted in the labor force participation rate.  Employed people are counted in the employment population ratio.  These three different uses of counting people in the work force all offer different perspectives in analyzing the current state of employment.

            The unemployment rate in March 2014 was 6.7 percent, which is what the rate has been steady at for several months now.  The number of people who are currently unemployed is 10.5 million.  Each one of these people now is actively seeking work.  The employment population ratio is 58.9 percent, and the percentage of people in the labor force is 63.2.  According to the Bureau of Labor Statistics, the total employment has increased in the month of March, while the unemployment rate has stayed around the same percentage.  This means that people are entering the labor force already employed. 

            For the rest of 2014, I suspect that the unemployment rate will stay about the same until the fall when it will rise.  I figure that during the summer people will keep on entering the labor force already employed, making the employment participation ration rise.  Then at the end of the summer when people start to lose their summer jobs, they will be considered unemployed, and still in the labor force.  After a while, the people will leave the labor force and no longer be considered unemployed, which will make the unemployment rate fall.  Since the economy has been on the rise since the recession, I think the unemployment rate will stay at a steady 6 to 8 percent.

            The unemployment rate is steady right now.  There are a good number of people who are actively seeking work.  On the bright side, there has also been an increase in the employment right.  This means that more people are entering the work force and becoming employed.  If more people are entering the work force, then the unemployment rate will be a better indicator of the current state of the country’s employment. Since the economy is now becoming more steady, the employment and unemployment rates will follow.

References

Mankiw, Gregory. (2012). Principles of Macroeconomics: Sixth Edition.  Mason, OH. South-

            Western Cengage Learning.