What is 'Unemployment Rate'

The unemployment rate is the share of the labor force that is jobless, expressed as a
percentage. It is a lagging indicator, meaning that it generally rises or falls in the wake
of changing economic conditions, rather than anticipating them. When the economy is in
poor shape and jobs are scarce, the unemployment rate can be expected to rise. When
the economy is growing at a healthy rate and jobs are relatively plentiful, it can be
expected to fall.

The official unemployment rate is known as U3. It defines unemployed people as those who are
willing and available to work, and who have actively sought work within the past four weeks.
Those with temporary, part-time or full-time jobs are considered employed, as are those who
perform at least 15 hours of unpaid family work.

The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a

percentage by dividing the number of unemployed individuals by all individuals currently in the labor
force. During periods of recession, an economy usually experiences a relatively high unemployment
rate.[1] The causes of unemployment are heavily debated.[3] Classical economics, new classical
economics, and the Austrian School of economics argued that market mechanisms are reliable
means of resolving unemployment. These theoriesargue against interventions imposed on the labor
market from the outside, such as unionization, bureaucratic work rules, minimum wage laws, taxes,
and other regulations that they claim discourage the hiring of workers. Keynesian
economics emphasizes the cyclical nature of unemployment and recommends government
interventions in the economy that it claims will reduce unemployment during recessions.

What is a 'Surplus'
A surplus is the amount of an asset or resource that exceeds the portion that is utilized.
A surplus is used to describe many excess assets including income, profits, capital, and
goods. A surplus often occurs in a budget, when expenses are less than the income
taken in or in inventory when fewer supplies are used than were retained. Economic
surplus is related to supply and demand.

BREAKING DOWN 'Surplus'

A surplus isn't always a positive outcome. In some cases, when a manufacturer
anticipates a high demand for a product that it produces and makes more than it sells
during that time period, it can have a surplus inventory which may, if it's deep enough,
lead to a financial loss for that quarter or year. When the surplus is of a perishable
commodity, such as grain, it could result in a permanent loss, or an asset write-down as
the inventory becomes bad.

Economic Surplus
An economic surplus is also known as total welfare. An economic surplus is related to
money, and it reflects a gain in the expected income from a product. There are two
types of economic surplus: consumer surplus and producer surplus.