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Labor Force Growth and the Unemployment Rate

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Will strong employment growth alone push the unemployment rate to zero? The unemployment rate measures the number of jobless persons actively seeking work, divided by the total number of working-age persons participating in the labor force. (The labor force consists of individuals who are either employed or seeking work). Hence, the unemployment rate can change in response to employment trends or to changes in the labor force. Because population growth is fairly stable, the participation rate largely determines the number of individuals in the labor force.

Suggested citation: “Labor Force Growth and the Unemployment Rate,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-01, pp. 13-14, 01.01.1998.

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