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| Representing a skilled laborer idle. |
The unemployment rate is an important measure of human capital and slack in the labor market. When the unemployment rate rises, it reflects unused human potential. In the past, labor was often viewed as interchangeable units, like parts of a machine. Today, however, the workforce is far more complex—shaped by education, creativity, training, technology, experience and diverse skills. This means the type of workers unemployed can reveal industry trends and signal the need for retraining and retooling. Markets change so assessing whether it is a broad slowdown or specific to certain industries can help understand shifts.
The Federal Reserve Board of Governors defines the unemployment rate as: “The unemployment rate represents the number of unemployed people as a percentage of the labor force. The labor force is made up of people who have a job and people who are jobless but are looking for work and available to work.”
Civilian Unemployment Rate
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