Unemployment Rate

Unemployment Rate

Unemployment rate is the amount of adults who do not have a job and want to work at the current wage level but cannot find a job. Although no figure can give all the nuances of the labor market completely, the unemployment rate provides important clues about the general outlook of the labor market.

While unemployment data give important clues about the economic situation of the country, it is also a useful macroeconomic factor as it can shape policy decisions.

A high unemployment rate in a country may be an indication of economic difficulties. In this respect, the unemployment rate has the power to affect financial markets as well. For this reason, investors also closely examine  this macroeconomic indicator. 

Many people think that unemployment data is a simple concept and that everyone who is unemployed is included in this data. However, unemployment data is calculated according to International Labor Organization (ILO) standards. These standards have been explained as a concept created by people who are ready to work and job seekers.

Since unemployment data are lagging data, this data is not used to predict changing economic conditions. Because this data shows the rise or fall that occurs after the activities take place. However, with this data, it can be learned whether the expectations in the financial markets are met. For this reason, it is closely followed by the markets.

Employment

Employment definition is termed as a paid mutual work arrangement between a recruiter and an employee. This term applies to an individual who is hired for a salary or compensation to initiate work or tasks for an organization. Although the employees can negotiate certain items in an employment agreement, the terms and conditions that are included and are mostly determined by the employer. This agreement could also be ended by the recruiter or the employee. 

Employed people are those aged 15 or over who report that they have worked in gainful employment for at least one hour in the previous week or who had a job but were absent from work during the reference week. The working age population refers to people aged 15 to 64. This indicator is seasonally adjusted and it is measured in terms of thousand persons aged 15 and over; and in numbers of employed persons aged 15 to 64 as a percentage of the working age population.

Types of employment

Full employment

It is the type of employment in which the conditions in the contract are fully met. Both the employer and the employee are obliged to fulfill their responsibilities. Statistics on unemployment are also clearer in countries where full employment is common. The number of employees and the number of unemployed in the country can be easily known.

Part-time employment

Part-time employees work for a ‘part’ of the day, usually in shifts and their work hours are less than that of those employed full time. The laws can change depending upon the employee position. Part-time employees are in a parallel position to full-time employees when it comes to employment protection legislation, although in some exceptions a part-time employee would need to work at a set minimum number of hours for a set period of time before actually getting a full-time job.

Informal employment

Unregistered employment; In terms of social security, it can be defined as the non-reporting or incomplete reporting to the relevant public institutions and organizations of the work of the persons who are involved in employment by working in legal jobs, in terms of days or wages. According to this definition, there are three types of undeclared work:

1. Employees are never notified to the Social Security Institution,

2. Incomplete reporting of working days,

3. It is the under-declaration of the earnings amount that is the basis of the insurance premium.

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week.

It shows the rate of unemployed (employees who do not have a job but are actively looking for a job) to apply for vacant job postings. This data published in the USA is measured by the Job Openings and Labor Turnover Survey (JOLTS).