The unemployment rate in an economy is the number of people who are unemployed as a ratio to the number of people in the labor force of the economy.  Unemployment has a direct effect on the welfare of the unemployed and invariably the economy in which they live.  The Current Population Survey (CPS), which is a monthly statistical survey of about 60,000 households, is used by the Bureau of Labor Statistics (BLS) uses the survey to provide a monthly report of the employment situation in the United States.  The survey is based on responses to a series of questions on work and job search activities, each person sixteen years and over in a sample household is classified as employed, unemployed, or not in the labor force.  A higher unemployment rate provides a signal that the economy may not be using some of its resources efficiently.

The unemployment rate is calculated as follows:

Unemployment Rate = Unemployed / Labor Force