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The unemployment rate measures joblessness among people in the labor force; the labor-force participation rate measures how much of the civilian noninstitutional population age 16 and older is working or actively seeking work. Because they use different denominators, the rates answer different questions and can move in different directions.
How the two rates are calculated
These are U.S. measures from the Current Population Survey (CPS), a monthly household survey. The U.S. Bureau of Labor Statistics (BLS) classifies people in the civilian noninstitutional population age 16 and older as employed, unemployed, or not in the labor force.
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| Measure | Numerator | Denominator | Question it answers |
|---|---|---|---|
| Unemployment rate (U-3) | People classified as unemployed | Civilian labor force: employed plus unemployed people | Among people in the labor force, what share is unemployed? |
| Labor-force participation rate | Civilian labor force: employed plus unemployed people | Civilian noninstitutional population age 16 and older | What share of this population is working or actively seeking work? |
| Employment-population ratio | Employed people | Civilian noninstitutional population age 16 and older | What share of this population is working? |
| U-6 | Unemployed people, marginally attached people, and people working part time for economic reasons | Labor force plus marginally attached people | How broad is labor underutilization under the BLS’s broadest headline alternative? |
The BLS calls U-3 the official unemployment rate. Its CPS concepts and definitions define the labor-force participation rate as the labor force as a percentage of the civilian noninstitutional population. The BLS explanation of how unemployment is measured also describes the related employment-population ratio.
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Who counts as unemployed?
Not working does not automatically mean a person is counted as unemployed. Under the ordinary CPS definition, a person generally must have had no employment during the reference week, been available to work, and made a specific effort to find work during the four weeks ending with that week. People temporarily laid off and expecting recall are an exception: they may count as unemployed without actively searching.
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Employment includes qualifying paid work, self-employment, certain unpaid family work, and temporary absence from a job or business. People who meet neither the employed nor unemployed definition are classified as not in the labor force. They are still part of the participation-rate denominator, but not the unemployment-rate denominator.
People who want a job but are not currently searching
Someone who wants a job but has not searched recently may be outside the labor force rather than officially unemployed. Discouraged workers are a subset of people outside the labor force: they want and are available for work, have searched during the past year, but are not currently looking because they believe no jobs are available. The BLS’s quick guide to Employment Situation methods and measurement explains this distinction.
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How to interpret the rates together
The unemployment rate can fall when people find jobs. It can also fall if jobless people stop searching and no longer meet the definition of unemployed. In that case, they leave the labor force without finding work. A change in participation can help show that labor-force engagement also shifted, but the two rates alone do not establish why it happened.
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How U-6 differs from participation
U-6 and the participation rate answer different questions. The BLS’s alternative measures of labor underutilization describe the U-1 through U-6 measures: U-4 adds discouraged workers to U-3, U-5 adds other marginally attached workers, and U-6 additionally includes people working part time for economic reasons. U-6 broadens the view of underutilization; participation measures the share of the population working or actively seeking work.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Keep comparisons consistent
- Compare the same population group and geography; the definitions here concern the U.S. civilian noninstitutional population age 16 and older.
- Use either seasonally adjusted or not-seasonally-adjusted figures consistently. BLS publishes both.
- Check the date and seasonal-adjustment status when using a specific monthly rate. The formulas above define the measures; they are not current readings.
- Do not assume other countries use identical definitions. Check each national statistical agency’s methods before making cross-country comparisons.
The civilian noninstitutional population excludes active-duty Armed Forces members and people living in institutions such as correctional facilities and residential care facilities.
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