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How to Understand the Unemployment Rate

What exactly is the unemployment rate? Your grandma is retired, does she count towards the unemployment rate? And even if you understand the unemployment rate, what impact does it have on your career? Fortunately for you, you’ve come to the right place. And no, your grandma doesn't count.
The Unemployment Rate Defined

The unemployment rate is calculated by diving the amount of people who don’t have a job by the amount of people who do have a job. Individuals who aren’t looking for work don’t factor into this figure, such as retirees, stay-at-home dads, and minors not old enough to work.

Another factor that’s not counted into this unemployment rate is what’s called "underemployment.” A great example of this is a recent college graduate with a finance degree working as a barista at your local coffee shop. Yes, this person has a job and is employed, but they don’t have a "career job" and are still actively job searching. Basically, there is more competition than the unemployment rate suggests.
What Does This Mean for You?

In recent years, the unemployment rate has dropped nationwide. While it’s promising that more and more jobs are opening up, this also means it’s time to take charge of your career and work hard to refine your best job-related skills.

Nancy Collamer, a career coach, suggests looking at the way you network. You shouldn’t only network when you’re unemployed—you should network all the time. You never know when a great opportunity will pop up, or when you badly need some job advice.

Another key factor is making sure you’re actively giving to your network—endorsing their skills on LinkedIn, providing job recommendations, etc. It may be common sense, but you become more valuable if you offer value. Once you’ve established yourself as a reliable contact, you’ll start to receive (job openings, interviews, etc.).

Assessing your mindset and attitude is also important. Career coach Erika Anderson recommends looking at your internal dialogue about yourself and your career. Are you stuck in your old ways, or willing to make a change? Also, it’s important to consistently remind yourself of your selling points. Why are you such an asset? You need to constantly highlight these skills in your resume, cover letter, and interview.

Also, don’t overlook the importance of volunteer work. A recent study showed that people who volunteer are 27 percent more likely to get a job. Volunteering is a great way to build skills and experiences you may not be getting in the workplace. Plus, it’s a wonderful opportunity to network and give back.
How Unemployment Impacts Your Job Search

It’s crucial to regularly check for job openings. You should be checking several times a week, if not daily. Part of understanding the unemployment rate is knowing that you’re not the only person looking for a new job. Jobs fill quickly, and you’ll miss opportunities by not looking often enough.

Another aspect to job searching is reaching out to hiring managers at companies before you know an open position exists. Less candidate take this route, which means you’ll have a leg up on the competition. If you’ve done a good job networking, have one of your contacts introduce you to a hiring manager. If not, don’t be scared to get on the phone or write an email and tell them how you can help their organization. A smart manager is always looking for great people, whether or not they are hiring at the time.

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