Counting Not In Labor Force The Unemployment Rate = 64.5%

moneycrashers.com: The rate is then calculated as the number of people who are actively looking for jobs (i.e. the “unemployed”) divided by the number of people who have jobs plus those actively looking (i.e. the “labor force”). Anyone who is not looking is not considered part of the calculation.

• For example, let’s say the BLS conducts a survey of 60,000 households that yields 110,000 respondents. In their survey, they find the following results:

• Of those respondents, 60,000 have jobs. They either work for an employer or have their own business.

• Another 10,000 say they are looking for work.

The remaining 40,000 are not considered part of the labor force. They may be going back to school, disabled and unable to work, or perhaps have given up looking for work because the economy is so bad. What’s most surprising is that the existence of this last group is completely ignored by the unemployment rate...