Unemployment

Unemployment refers to a person who is actively searching for employment. The Unemployment Rate, expressed as a percent, divides the number of registered Unemployed by all Labour Market participants .

Unemployment data is an important series to monitor when investing in the Stock Market. It is considered to be an important economic indicator as to where an economy is positioned in the Economic Cycle. A High Unemployment Rate could indicate an economy is approaching or already in a recession. low levels of Unemployment could signal constraints in the Labour Market and an economy which could be Overheating. The concept of unemployment is easy to understand as it refers to a person who is actively searching for employment but is unable to find work. The most common measure used is the Unemployment Rate.

The Unemployment Rate is calculated, by taking the number of registered Unemployed Workers divided by total Labour Market participants, expressed as a percent. The details of how Employment and Unemployment data is measured are critical as unemployment is both an economic and an emotional issue. Unemployment could be classified as Structural where jobs have disappeared from an area, possibly due to advances in Technology. Or classified as Cyclical due to current stage in the Economic Cycle and is expected to improve. Or Frictional Unemployment, which is just part of the normal functioning of a Labour Market and refers to the time required for someone to find, interview and accept a new job.