The unemployment rate is a key economic indicator that measures the percentage of the labour force actively seeking employment but unable to find work. It is calculated by dividing the number of unemployed individuals by the total labour force, including both employed and unemployed persons, then multiplying by 100. The labour force comprises individuals aged 16 and older who are either employed or actively looking for work.

The unemployment rate reflects the health of an economy. A high rate suggests economic distress, with more people struggling to find jobs, while a low rate indicates a robust economy with ample employment opportunities. However, it doesn’t capture underemployment or those who have stopped searching for work, known as “discouraged workers.” Governments and economists closely monitor this rate to guide economic policies, affecting wages, consumer spending, and overall economic growth.