Will the Unemployment Rate Stall in 2013? (Extra Segment)

00:04 Let’s think about the definitions of what an unemployed person is. It seems obvious; it’s someone who doesn’t have a job. But in reality, the Bureau of Labor Statistics thinks of an unemployed person as someone who doesn’t have a job and is actively looking for a job. And he has to be looking actively for a job within the last four weeks. So therefore a discouraged worker could be a person without a job, not actively looking for a job, or at least, not in the last four weeks, that nevertheless would want to work if a job were offered. So that’s going to be a distinction that’s important to keep in mind.

00:37 Now we also talk about something called Labor Force Participation. Well, that’s just the sum of the unemployed, these workers who are actively looking for a job; and the employed, those that have a job, relative to the population. So the unemployment rate can vary for two factors. One is that really more jobs are being created, the more people are moving from the unemployed to the employed. But it could also be that individuals are exiting the labor force. Meaning that they don’t have a job, but they're not actively looking for a job.

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