Changes

After reaching a low of 4.1% in October, 2006, the U.S. unemployment rate has been moving upward, reaching 10.0% in January 2010.  

After reaching a low of 4.1% in October, 2006, the U.S. unemployment rate has been moving upward, reaching 10.0% in January 2010.  

Weekly estimates of unemployment use the number of persons filing new claims for unemployment insurance (UI) benefits.  Much more accurate data is based on large scale interview surveys, and is reported on the first Friday of the following month.  Since 1940 the monthly Current Population Survey (CPS) has been used. <ref>See [http://www.bls.gov/cps/cps_htgm.htm Bureau of Labor Statistics]</ref>

Weekly estimates of unemployment use the number of persons filing new claims for unemployment insurance (UI) benefits.  Much more accurate data is based on large scale interview surveys, and is reported on the first Friday of the following month.  Since 1940 the monthly Current Population Survey (CPS) has been used.<ref>See [http://www.bls.gov/cps/cps_htgm.htm Bureau of Labor Statistics]</ref>

==Causes==

==Causes==

Three types of unemployment can be distinguished by their causes. '''Frictional''' unemployment is the normal churning of the job market; people enter the labor force from school or home, and spend time looking for the best job. Most frictional unemployment is voluntary and is desirable to keep the economy working. '''Seasonal''' unemployment refers to jobs that operate at certain seasons, such as construction and tourism industries. Because teachers are paid during summer vacation, they are not counted as unemployed  in the summertime. The '''"normal unemployment rate'''" (frictional plus seasonal) is about 3% to 4%.  '''[[Unemployment insurance]]''' is designed to help people smooth over their financial needs during frictional and seasonal unemployment.  

Three types of unemployment can be distinguished by their causes. '''Frictional''' unemployment is the normal churning of the job market; people enter the labor force from school or home, and spend time looking for the best job. Most frictional unemployment is voluntary and is desirable to keep the economy working. '''Seasonal''' unemployment refers to jobs that operate at certain seasons, such as construction and tourism industries. Because teachers are paid during summer vacation, they are not counted as unemployed  in the summertime. The '''"normal unemployment rate'''" (frictional plus seasonal) is about 3% to 4%.  '''[[Unemployment insurance]]''' is designed to help people smooth over their financial needs during frictional and seasonal unemployment.  

'''Structural''' unemployment is much more serious. It means a mis-match of jobs and workers. For example, there may be jobs in the cities and unemployment in mining or logging areas, but people are reluctant to move because of family ties.  There may be jobs available in some fields but people who are unemployed lack the necessary skills. This is a structural problem solved by migration, job training and education.

'''Structural''' unemployment is much more serious. It means a mis-match of jobs and workers. For example, there may be jobs in the cities and unemployment in mining or logging areas, but people are reluctant to move because of family ties.  There may be jobs available in some fields but people who are unemployed lack the necessary skills. This is a structural problem solved by migration, job training and education.

Finally--and most serious--is '''cyclic unemployment''' (as in [[Recession of 2008|2008-2009]] and the [[Great Depression]]), when the whole economy is sagging and businesses lay off tens of thousands of workers every day. Some new jobs are created every month but they are overwhelmed by the jobs that are lost.  In February 2009, the U.S. economy lost 651,000 jobs net (that is, jobs that disappeared outnumbered jobs that were created by 651,000). Through April 30, 2009, about 5.7 million jobs were lost in 2008-9.

Finally—and most serious—is '''cyclic unemployment''' (as in [[Recession of 2008|2008-2009]] and the [[Great Depression]]), when the whole economy is sagging and businesses lay off tens of thousands of workers every day. Some new jobs are created every month but they are overwhelmed by the jobs that are lost.  In February 2009, the U.S. economy lost 651,000 jobs net (that is, jobs that disappeared outnumbered jobs that were created by 651,000). Through April 30, 2009, about 5.7 million jobs were lost in 2008-9.

[[File:Un-0409.jpg|thumb|250px|update for April 2009]] [[Image:Job-loss-09.jpg|thumb|250px|US job losses January 1-March 31, 2009]]   

[[File:Un-0409.jpg|thumb|250px|update for April 2009]] [[Image:Job-loss-09.jpg|thumb|250px|US job losses January 1-March 31, 2009]]   

In times of recession people are unemployed for much longer periods. In July 2009, 5 million people (one out of three unemployed) had been out of work for six months or longer.<ref> Bureau of Labor Statistics, "The Employment Situation -- July 2009" [http://www.bls.gov/news.release/empsit.nr0.htm online]</ref>

In times of recession people are unemployed for much longer periods. In July 2009, 5 million people (one out of three unemployed) had been out of work for six months or longer.<ref>Bureau of Labor Statistics, "The Employment Situation -- July 2009" [http://www.bls.gov/news.release/empsit.nr0.htm online]</ref>

==Natural rate==

==Natural rate==

Friedman notes:

Friedman notes:

:All of the progress that the US has made over the last couple of centuries has come from unemployment. It has come from figuring out how to produce more goods with fewer workers, thereby releasing labor to be more productive in other areas. It has never come about through permanent unemployment, but temporary unemployment, in the process of shifting people from one area to another.<ref> See [http://www.rightwingnews.com/interviews/friedman.php interview]</ref>

:All of the progress that the US has made over the last couple of centuries has come from unemployment. It has come from figuring out how to produce more goods with fewer workers, thereby releasing labor to be more productive in other areas. It has never come about through permanent unemployment, but temporary unemployment, in the process of shifting people from one area to another.<ref>See [http://www.rightwingnews.com/interviews/friedman.php interview]</ref>

==See Also==

==See also==

[[File:Employed.jpg|thumb|300px]]

[[File:Employed.jpg|thumb|300px]]

* [[Cyclical unemployment]]

* [[Cyclical unemployment]]

==Further reading==

==Further reading==

* Blanchard, Olivier J. "European Unemployment: The Evolution of Facts and Ideas," ''Economic Policy'', Vol. 21, No. 45, pp. 5-59, January 2006  

* Blanchard, Olivier J. "European Unemployment: The Evolution of Facts and Ideas," ''Economic Policy'', Vol. 21, No. 45, pp.&nbsp;5–59, January 2006  

* Gallaway, Lowell, Richard Vedder, Martin Bronfenbrenner. ''Out of Work: Unemployment and Government in Twentieth-Century America'' 336 pp [http://www.questia.com/library/book/out-of-work-unemployment-and-government-in-twentieth-century-america-by-lowell-gallaway-richard-vedder-martin-bronfenbrenner.jsp online edition], by conservative economists

* Gallaway, Lowell, Richard Vedder, Martin Bronfenbrenner. ''Out of Work: Unemployment and Government in Twentieth-Century America'' 336 pp [http://www.questia.com/library/book/out-of-work-unemployment-and-government-in-twentieth-century-america-by-lowell-gallaway-richard-vedder-martin-bronfenbrenner.jsp online edition], by conservative economists

* Garraty John A. ''Unemployment in History: Economic Thought and Public Policy'' (1978)

* Garraty John A. ''Unemployment in History: Economic Thought and Public Policy'' (1978)

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