Saturday School — How Is the Unemployment Rate Calculated?

Calculating the unemployment rate is not as simple as you might think. In fact, the criteria used to figure the rate can lead to some strange outcomes.

Saturday School — How Is the Unemployment Rate Calculated? Photo by Luna Vandoorne / Shutterstock.com

Figuring out the unemployment rate seems simple enough: Look at the overall workforce, determine the percentage of people not working and — presto — you have the unemployment rate.

Alas, as with most things in life, it’s not that simple. As this Khan Academy video shows, you have to account for many other factors when calculating the unemployment rate. Those factors can create some bizarre outcomes — such as a horrible economy that actually causes the unemployment rate to fall.

Check out the video to learn more.

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Are you surprised at how the unemployment rate is calculated? Sound off by commenting below or on our Facebook page.

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