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What you will learn
in this Module:
• How unemployment is Module 12
measured
• How the unemployment rate
is calculated The Meaning and
• The significance of the
unemployment rate for the
economy Calculation of
• The relationship between the
unemployment rate and
economic growth Unemployment
The Unemployment Rate
One of the most important issues in the 2008 presidential election was the growing
unemployment rate. Figure 12.1 shows the U.S. unemployment rate from 1948 to the
early part of 2010; as you can see, the labor market hit a difficult patch starting in
figure 12.1
The U.S. Unemployment Unemployment
Rate, 1948–2010 rate
The unemployment rate has fluctuated 12%
widely over time. It always rises during re-
cessions, which are shown by the shaded 10
bars. It usually, but not always, falls during
periods of economic expansion. 8
Source: Bureau of Labor Statistics; National Bureau of
Economic Research. 6
4
2
1948 1960 1970 1980 1990 2000 2010
Year
118 section 3 Measurement of Economic Performance
