The Unemployment Index - Explained

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The Unemployment Index - Explained

The index is based on the number of employed people in the country divided by the number of employable people in the country.

This is different than the number of employed, divided by the number of employed plus unemployed.

Many of the disabled and housewives are employable under some conditions and count as employable.

When the numbers change, each month, the index is recomputed with a small delay. Large changes in the index are unrealistic and also when fired, people are not immediately out of work; it can take some time for people to start counting as unemployed.

The delay is smoothing the index movements, both up and down in exactly the same way.

If nothing changes, the index will correct the largest part of the difference within a day or two. The period is reduced recently.

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