Financial Terms / U - V / Unemployment rate

Unemployment rate

The unemployment rate is calculated by dividing the unemployed individuals in an economy by the total number of individuals currently in the labor force in percentage terms. For example, if there are five unemployed people in a total sample of 100 people who can work, the unemployment rate is at 5%. 

Unemployed individuals are only those actively seeking a job and willing to work, and individuals who retired early or cannot work aren't considered in the unemployment numbers.