Unemployment is the share of an economy’s working-age population that is jobless and actively seeking employment. It is a key economic indicator as it indicates the ability (or inability) of people to obtain income from work and contribute to the production of goods and services. A high unemployment rate typically implies that an economy is experiencing sluggish or declining economic growth. Governments may attempt to reduce the unemployment rate through monetary and fiscal policies.
The definition of unemployment varies by country, though many national statistical agencies use the ILO definition. This allows for international comparisons of unemployment data. The way in which unemployment is measured also varies from country to country, and these differences limit the usefulness of comparisons across time periods.
There are a variety of methods of measuring unemployment, including interviewing households and analyzing individual-level data. In order to collect accurate information, a series of questions is asked about the work activity of each household member. These questions include whether they have a job, how long they have been without a job and what methods they have used to look for work. Other relevant information includes the industry and occupation of the last job held, if the current unemployment is related to an industrial dispute or natural disaster, and the reason for leaving their previous job (stay-at-home parents returning to work, workers who lost their job, etc.).
The official unemployment statistics are calculated from sample surveys, which means that the numbers reported are not an exact count of all the working-age population. However, it is estimated that sampling error can be kept to about 3% of the total number of unemployed, so the results are highly accurate. Each month, the national summary statistics are published in a news release called The Employment Situation and detailed individual-level information is available through various database tools.