1. ECO285 - Macroeconomics Dr. Dennis Foster - Spring 2014 The Nature and Concepts of Unemployment peak trough recovery contraction

2. Required reading  The Unemployment Rate & Beyond. The Unemployment Rate & Beyond  Unemployment Insurance & moral hazard. Unemployment Insurance & moral hazard  Reconciling survey data. Reconciling survey data  Taking the “Un” out of unemployment. Taking the “Un” out of unemployment  How the government measures unemployment. How the government measures unemployment  Discouraged workers. Discouraged workers  Shadow statistics unemployment rate. Shadow statistics unemployment rate  Why is unemployment so high? Why is unemployment so high  Deciphering the government’s data. Deciphering the government’s data  Why aren’t farmers counted? Why aren’t farmers counted

3. Unemployment  Measured rate depends on –the population, –the civilian population, –the civilian population over 16 yrs. old (&…), –the labor force, –and whether one is looking for work.

4. Jan 2014 - Getting from A to Z 317.5 162.0 155.5 145.5 10.2

5. Who is unemployed?  To be unemployed, you have to be in the labor force and willing/able to work and looking for work. Who is not counted: –Full time student looking for a job. –Retirees looking for a job. –But, if either has a job, they are employed!  To be employed, you have to be working (!) –at least 1 hour during survey week, or –absent from work due to illness, vacation, strike.

6. Data – Numbers Employed

7. Unemployment rate by schooling

8. Unemployment duration, 1994-2014

9. Unemployment & the LFPR

10. Unemployment rate – 6 degrees of separation

11. Current data on the six U’s

12. A paradox about unemployment Yes!!! If the labor force is rising at the same time. For example: U r = 5,000/100,000 = 5%, and, now U r = 7,500/110,000 = 6.82%, Can the number of people employed rise at the same time as the unemployment rate rises?

13. Why do people get unemployed?

14. Data – seasonal adjustments  To remove the influence of predictable seasonal fluctuations, such as: –Students graduating in May and entering the labor force. –Christmas shopping season and temporary boost in employees. –Other seasonal activities – Snowbowl, Grand Canyon, et al. –Weather-related effects on employment. –Other holiday effects.  All the data you see is adjusted.

15. ECO285 - Macroeconomics Dr. Dennis Foster - Spring 2014 The Nature and Concepts of Unemployment peak trough recovery contraction