The Unemployment Rate

The unemployment rate

An unemployed person is one who is able and willing to work yet is unable to find a job. The unemployment rate is the number of unemployed workers divided by the total civilian labor force, which includes both the unemployed and those with jobs. Measuring the number of unemployed workers actually seeking work is very difficult, but there exists several different methods to do so. Each method has its own biases and the different systems that make comparing unemployment statistics between countries very difficult. Moreover, Unemployment has an impact in society and our economy. There are several costs involved in unemployment, but on the other hand, there is a benefit involved with it too. The likely costs include increased poverty, crime, political instability, mental health problems, and diminished health standards. But it is beneficial for the entire economy because it keeps inflation form being high. The unemployment rate is the impact of the economy has on people.

There are two permanent government projects conducted by the United States Census Bureau or the Bureau of Labor Statistics for the United States Department of Labor that gather employment statistics monthly. Many people care about the number of unemployed, economists typically focus on the unemployment rate. The rate has varied throughout the years. For examples, as showing in the fig:1 below, In January 2001 the unemployment rate was at 4.2%, January 2002 it move up to 5.7%, January 2003 rose to 5.8%, January 2004 went back down to 5.7%, and as of July 2005 our unemployment rate is at 5.2 percent.

U.S

Employment Rate

Fig: 1. The Graph above is provides by US Department of Labor, Bureau of Labor Statistics. This graph is based on the labor force statistics from the current population survey and indicating unemployment rate in the United States form the year 2001 today’s year 2005.

S&P 500

Standard & Poor’s (S&P), designed to reflect the U.S equity market and through out the markets, the U.S economy. The S&P 500 focuses on the large cap area of the market; however, since it includes a significant portion of the total value market, it also represents the U.S market. The McGraw-Hill companies comment that” indices should be fair, meaning that an investor who buys all the stocks in an index with the index weights can achieve the same performance that the Standard & Poor’s calculates” (Maureen O’Shea, Media relations).

The S&P 500 dates back to 1923, when Standard and Poor introduces an index covering 233 companies. The index as it is known today, was introduce in 1957 when it was expanded to include 500 companies (Corporate Communications). The S&P 500 companies are the leaders of the