unemployment

noun
un·​em·​ploy·​ment | \ ˌən-im-ˈplȯi-mənt How to pronounce unemployment (audio) \

Definition of unemployment

1 : the state of being unemployed : involuntary idleness of workers also : the rate of such unemployment

Examples of unemployment in a Sentence

My unemployment lasted about six months. Unemployment has been increasing for months. The current unemployment rate is six percent.
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Recent Examples on the Web

The unemployment rate remained at a nearly 50-year low of 3.6%. San Diego Union-Tribune, "U.S. employers add just 75,000 jobs in May; unemployment steady at 3.6%, but falls to 6.2% for African Americans," 7 June 2019 Republicans have cited the passage of the tax-cut law, low unemployment rates and wage increases as signs that Trump’s policies have buoyed the economy. Bloomberg News, The Mercury News, "Tariffs have already wiped out tax bill savings for average Americans," 7 June 2019 Trump has urged Powell to cut interest rates, but the central bank had pushed back, saying a strong economy with unemployment below 4 percent does not need the aid of low rates. Heather Long, Washington Post, "The fate of Trump’s economy now hinges on the Federal Reserve, the agency the president called ‘crazy’," 6 June 2019 The unemployment rate was unchanged at a 50-year low of 3.6%, the Labor Department said Friday. Paul Davidson, USA TODAY, "Economy added just 75,000 jobs in May, strengthening case for Fed interest rate cut," 6 June 2019 Though competition has applied some pressure on employers to raise wages, overall, wages remained subdued given the low unemployment rates, the Fed's report stated. Erin Douglas, Houston Chronicle, "Economic growth improved, but trade woes hurt business optimism across U.S.: Fed report," 5 June 2019 Although the economy remains strong, with low unemployment, a healthy stock market, and solid consumer confidence, finding a new vehicle that fits a need for affordability could be tough, the analysts said. Eric D. Lawrence, Philly.com, "In the market for a used car? Tariff talks might benefit you," 5 July 2018 Although the economy remains strong, with low unemployment, a healthy stock market and solid consumer confidence, finding a new vehicle that fits a need for affordability could be tough, the analysts said. Eric D. Lawrence, Detroit Free Press, "In the market for a used car? Tariff talks might benefit you," 27 June 2018 Although the unemployment rate is historically low, data on new job creation in industries fueled by R&D is disappointing, MIT researchers said. Angus Loten, WSJ, "U.S. Government Urged to Boost Technology R&D," 22 May 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'unemployment.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of unemployment

1789, in the meaning defined at sense 1

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Statistics for unemployment

Last Updated

11 Jun 2019

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The first known use of unemployment was in 1789

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More Definitions for unemployment

unemployment

noun

Financial Definition of unemployment

What It Is

Unemployment occurs when one does not have a job. In the financial world, the term is often short for unemployment rate, which is the percentage of employable people in a country’s workforce who are over the age of 16 and actively seeking work.

The formula for unemployment rate is:
Number of Unemployed/ Total Labor Force

How It Works

The Bureau of Labor Statistics reports unemployment in its Employment Situation report, which is released on the first Friday of each month at 8:30 a.m. EST. The report discloses the current unemployment rate, the change in the unemployment rate and other labor statistics. The report presents data for one week of the month, which always includes the 12th day of that month. The data in the report comes from surveys of more than 250 parts of the U.S. and from almost every major industry. Two surveys are conducted: the household survey, which interviews 60,000 households, and the establishment survey, which reviews data from 160,000 nonfarm businesses and agencies.

It is important to note that unemployment is different from not working. Some people may be in school full-time, working in the home, disabled or retired. They are not considered part of the labor force and therefore are not considered unemployed. Only people not working who are looking for work or waiting to return to a job are considered unemployed.

There are three kinds of unemployment. Frictional unemployment exists when a lack of information prevents workers and employers from becoming aware of each other. It is usually a side effect of the job-search process, and may increase when unemployment benefits are attractive enough to prolong job searches. Structural unemployment occurs when changing markets or new technologies make the skills of certain workers obsolete. Cyclical unemployment occurs when there is a general decline in business activity concurrent with a typical economic cycle.

There are four kinds of unemployed people, and it is important to note that not all unemployed people are unemployed because they lost their last job. Indeed, job losers are people who have been laid off or fired, either temporarily or permanently. However, job leavers are people who have voluntarily left their jobs, and the size of this group may actually indicate confidence in the strength of the economy. Re-entrants are people who left the labor force for a time and are now returning, such as parents who left to rear families or those who left to pursue additional schooling. New entrants are people seeking employment for the first time.

Some level of unemployment will always be present in an economy as industries expand and contract, as technological advances occur, as new generations enter the labor force, and as long as workers can voluntarily seek better opportunities. This is why most economists agree that there is a natural rate of unemployment in the economy (usually 4%-6%). This natural rate is most affected by the number of youthful workers in the labor force, who tend to experience more unemployment as they change jobs and move in and out of the labor force, and public policies that may discourage employment or the creation of jobs (such as a high minimum wage, high unemployment benefits, and low opportunity costs associated with laying off workers).

Why It Matters

Employment is the primary source of personal income in the U.S. and thus a source of economic growth. This is primarily why unemployment, which is a lagging indicator, can provide considerable information about the state of the economy and about particular sectors of that economy. For example, high unemployment is generally indicates an economy is underperforming or has a falling gross domestic product, suggesting weak labor demand, unproductive labor policies, or mismatches between the demands of workers and employers. Low or falling unemployment may signal increases in the supply of whatever the new jobs produce, which suggests an expanding economy. Unemployment can also point to changes in industry sectors. For example, changes in one job sector, such as construction jobs, can signal changes in other economic measures, such as housing starts. For these reasons, unemployment is one of the most widely used economic indicators, and its timeliness is especially appreciated.

Because unemployment statistics are so heavily relied upon, differences between the expected unemployment rate and the reported rate may affect other parts of the economy. For example, unexpectedly low unemployment may motivate the Federal Reserve to increase interest rates in order to curb a possibly overheating economy, and this in turn affects stock and bond prices. The currency markets are especially sensitive to unemployment rates because an unexpected decrease in employment usually corresponds to a rise in the value of the U.S. dollar.

There is some controversy regarding how unemployment is measured. For example, the establishment survey only counts employees of companies that provide payroll counts, thereby excluding the self-employed. Likewise, the relatively small size of the household survey is often criticized for introducing volatility to the calculations. Additionally, critics state that some workers are incorrectly categorized. Discouraged workers, for example, are not considered unemployed, because they are no longer searching for work even though most would accept employment if it were offered. Part-time workers are considered employed even if they work only one hour a week. People in the underground economy (such as drug dealers or prostitutes) or those rejecting employment paying less than welfare, food stamps, and other forms of public assistance are also considered unemployed. These measurement controversies are why many analysts consider the rate of employment (which is not simply 1 minus the unemployment rate—it is separately measured by the Bureau of Labor Statistics) a better indicator of job availability.

Source: Investing Answers

unemployment

noun

English Language Learners Definition of unemployment

: the state of not having a job
: the total number of people who do not have jobs in a particular place or area
US : money paid by the government to someone who does not have a job

unemployment

noun
un·​em·​ploy·​ment | \ ˌən-im-ˈplȯi-mənt How to pronounce unemployment (audio) \

Kids Definition of unemployment

1 : the state of being out of work
2 : the number of people who do not have jobs

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Comments on unemployment

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