The Unemployment rate is the percentage of the US labor force that is unemployed. It is calculated by dividing the number of unemployed individuals by the sum of the number of people unemployed and employed. An individual is counted as unemployed if they are over the age of 16 and actively looking for a job, but cannot find one. Students, who choose not to work, and retirees, are not counted in the unemployment rate.
Total civilian population211,171,000 (Excluding those under 16, members of the military, and persons in institutions)
– Not in Labor force 69,304,000 (Retired, students, individuals choosing not to work)= Labor force 141,868,000 (Total population minus those not in labor force)- Employed 135,780,000 (Individuals with jobs)= Unemployed 6,088,000 (Individuals without a job and actively searching)The unemployment rate for the month of March 2001 was 4. 3 percent, a tenth of a point increase from the January and February 2001 rate of 4. 2%. The number of individuals employed decreased by 86,000.
An unemployment rate of 4. 3 percent for March 2001 is the highest unemployment rate since July 1999, but only slightly higher than the 3. 9 to 4. 1 percent range from October 1999 to the end of 2000.
Prior to that, the unemployment rate had been in a steady decline since shortly after the last recession in 1990-1991. The average monthly increase in employment was approximately 155,000 in 2000 and 220,000 in 1999. For almost ten years, unemployment has fallen and the number of employed persons has increased by more than 15 million. In March 2001, the number of jobs decreased by 86,000, the largest monthly decrease since 1991. Job losses were most prominent in the manufacturing sector (81,000 jobs), but there were also losses in the retail trade sector (46,000 jobs). These losses were partially offset by employment increases experienced in the construction and finance sectors.
Growth in employment in 2000 was 1. 9 million; in 1999, the increase in employment equaled 2. 8 million. For most of 2000, unemployment remained between 3.9 and 4. 1 percent of the labor force. In the first three-quarters of 2000, the numbers of individuals in the labor force were increasing at a rate that many observers said could not be sustained without considerable inflationary pressures. The growth in the labor force depends upon the growth of the working age population and increases in the percentage of that group willing to work.
Projections are that the size of the group will continue to grow slightly more than one percent a year and that the percentage working will not increase significantly. Under those conditions, the sustainable monthly growth in jobs is about 155,000. The last three months of 2000 have shown growth in the labor force that is less than that sustainable growth rate. Newspapers and magazines are writing about the slowing growth in the U. S. economy.
References are pointing to the slowing growth in spending which is resulting in cutbacks in production and in some cases employment. The result of that slowing growth is this month’s increase in the unemployment rate and decrease in employment. In May of 1999, the Federal Reserve began a policy of slowing the rate of growth in the money supply and creating increases in short-term interest rates. That policy lasted through November of 2000.
The goal was to slow the rate of growth in spending in the economy to be more in line with the growth in capacity. That policy has surely had an affect and evidence of that are beginning to appear in slower growth in real gross domestic products (GDP) in the last quarter of 2000, a rise in unemployment from October through February, and the slowing increase in the number of jobs. Inflation is a sustained increase in the overall level of prices. The most widely reported measurement of inflation is the consumer price index (CPI).
The CPI measures the cost of a fixed basket of goods relative to the cost of that same basket of goods in a base year. Changes in the price of this basket of goods approximate changes in the overall level of prices. The seasonally adjusted consumer price index in March was 176. 3. The price index was equal to 100 during the period from 1982 to 1984.
The interpretation is that prices in market basket of goods purchased by the .