The unemployment rate indicates the percentage of the total labor force that is not working, but is actively looking for work. These figures help us understand how the economy is doing. Economist classify unemployment in four types: frictional,structural,cyclical and seasonal.
Frictional Unemployment is a short term unemployment which includes,people who are unemployed while waiting to start a better job, those re-entering the job market or those entering for the first time.This type of unemployment is always present and has little impact on the economy.
Structural Unemployment is caused by a mismatch between available jobs and the skills of available workers in an industry or region. Retraining and skill-building programs are often required to reduce structural unemployment.
Cyclical Unemployment,occurs when a downturn in the business cycle reduces the demand for labor throughout the economy.
The last type is seasonal unemployment which occurs during specific seasons in certain industries. With the economy the way it is and unemployment at an alltime high percentage rate, the categories are of small consolation to someone who is unemployed, but they do help economist understand the problem of unemployment in our economy.
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