Unemployment (National)

Unemployment FormulaUnemployment FormulaUnemployment Rate=

Unemployed Persons/Total Labor Force X 100

Labor Force= all civilians 16+ who are working or looking for a job

Unemployed Persons= 16+ civilians who are looking for a job but do not have one

Unemployment (National)

Unemployment (National)

Labor Force Participation RateLabor Force Participation Rate

• % of working age people who are– Working– Looking for a Job

• Working Age– 16-64

Labor Force Participation RateLabor Force Participation Rate

Labor Force Participation RateLabor Force Participation Rate

Labor Force Participation RateLabor Force Participation Rate

Business CycleRecession- real GDP goes down for at least 6 months.

REAL

GDP

GDPGDP

• Gross Domestic Product

• Total valueTotal value (in dollars) of all final goods and services produced within a country within a given year

GDP

• C + I + G + NX

• Don’t Count– Used– Transfers– Non-market– Intermediate goods

• Frictional

• Structural

• Cyclical

• Seasonal

• Not

Hit the debt ceiling, government slashes spending, GDP tanks

• Frictional

• Structural

• Cyclical

• Seasonal

• Not

You can’t stand this class anymore, drop out, and start looking for work

• Frictional

• Structural

• Cyclical

• Seasonal

• Not

A former switchboard operator is having trouble finding a skilled

position• Frictional

• Structural

• Cyclical

• Seasonal

• Not

New Jersey surf instructor in January

• Frictional

• Structural

• Cyclical

• Seasonal

• Not

Mr. Parish this spring.

• Frictional

• Structural

• Cyclical

• Seasonal

• Not

Mr. Parish this spring.

• Frictional

• Structural

• Cyclical

• Seasonal

• Not

Which Type of Unemployment?

• With new and easier tax software, John is afraid H&R Block might not need him in a few years.

– Frictional– Cyclical– Structural– Seasonal

Poor __________ Assignment

• A. Write a brief story about a person who experiences all four types of unemployment within one year.

• B. Title it- Poor (name of character)

• C. Put the type of unemployment in parenthesis, behind each example. (i.e. structural)

Unemployment FormulaUnemployment FormulaUnemployment Rate=

Unemployed Persons/Total Labor Force X 100

Labor Force= all civilians 16+ who are working or looking for a job

Unemployed Persons= 16+ civilians who are looking for a job but do not have one

September Jobs Report

• 7.2% unemployment rate (7.3%

• Unemployed= 11.3 million

• Long Term Unemployed = 4.1 million– 27 weeks

• U-6 rate= 13.6% (13.7%)

• Added 148,000 – 12 month average = 185,000

CalculateCalculatePopulation = 10,000

Population 16-64 = 8,000

Employed Persons = 5,000

Unemployed Persons = 350

---------------------------------------------------------

Labor Force = ____________

Unemployment Rate = ______________

Labor Force Participation Rate = _______

CalculateCalculatePopulation = 10,000

Population 16-64 = 8,000

Employed Persons = 5,000

Unemployed Persons = 350

---------------------------------------------------------

Labor Force = 5,350

Unemployment Rate = 6.54%

Labor Force Participation Rate = 66.88%

Labor Force Participation RateLabor Force Participation Rate

• % of working age people who are– Working– Looking for a Job

• Working Age– 16-64

Consumers Price Index

Subgroups June 2000 June 2001

Restaurant meals and ready-to-eat food

1016 1054

Household appliances and furnishings

996 1043

Clothing 1005 1022

Footwear 1000 1006

Alcoholic drinks 1015 1041

Stationery, books, magazines and newspapers

1008 1066

All Groups 1020 1053

Consumer Price IndexConsumer Price Index

• Babe Ruth’s Salary– 1931= $80,000

• Average Player Today= $2,272,620

Consumer Price IndexConsumer Price Index

• Herbert Hoover= $75,000

• President Bush = $400,000

Consumer Price IndexConsumer Price Index

• 1.5% annual

• .1% August

Consumer Price IndexConsumer Price Index

• Measures change in price level of a “fixed basket of goods”

• Urban Areas

• Used for Social Security “cost of living” adjustments

CPI (Consumer Price Index)CPI (Consumer Price Index)

GDP Deflator versus CPI

• GDP Deflator- changing basket

• CPI- fixed basket

Economic Indicators• Business Cycle

– “Real” GDP versus “Nominal”– GDP Deflator– C+I+G+NX– 6 month contraction = Recession

• Unemployment Rate– 4 Types– Calculation

• Inflation– CPI/GDP Deflator– Cost of Living Adjustment– “Real” Income

Stock Indexesmeasure the performance of a segment of the stock market

• Dow Jones Industrial Average – 30 Large Companies

• NASDAQ– 3,000 companies– Technology/growth companies (ex- Google)

• S&P 500– 500 companies of various industries

NASDAQ

Economic Indicators• Business Cycle

– *GDP = 16 Trillion– GDP Growth = (about) 2%

• Unemployment Rate– *7.2%

• Inflation– CPI = 1.5%

• Stock Indices

Unemployment FormulaUnemployment FormulaUnemployment Rate=

Unemployed Persons/Total Labor Force X 100

Labor Force= all civilians 16+ who are working or looking for a job

Unemployed Persons= 16+ civilians who are looking for a job but do not have one

Economic Indicators• Business Cycle

– *GDP = 15 Trillion– GDP Growth = (about) 2%

• Unemployment Rate– *7.9%

• Inflation– CPI = 3.2%

• Stock Indices