Are Discouraged Workers Included In The Unemployment Rate

Frictional unemployment also occurs when students are looking for that first job or when mothers are returning to the workforce. It also happens when workers are fired or, in some cases, laid off due to business-specific reasons, such as a plant closure.As measured by the BLS, the unemployment rate is defined as the percentage of unemployed people who are currently in the labor force. In order to be in the labor force, a person either must have a job or have looked for work in the last four weeks.The U.S. unemployment rate was 4.7% as of May 2016, but at the same time, the U.S. underemployment rate was 13.7%. The unemployment rate is defined by the Bureau of Labor Statistics (BLS) as including "all jobless persons who are available to take a job and have actively sought work in the past four weeks."Discouraged workers can reduce the labor force participation rate if unemployment is serious enough. At the beginning of a recession, the number of discouraged workers increases as the participation rate decreases. ... It had dropped to 65.8 percent during the 2003 recession, but then rose to 66.4 percent in January 2007.