Which of the following decreases the official U-3 unemployment rate?
A) Workers leave the labor force.
B) More women enter the labor force and seek jobs.
C) Young people graduate from college and start to look for their first full-time job.
D) None of the above because they all increase or do not change the unemployment rate.

Question

Quizplus · Accepted Answer

The U-3 unemployment rate measures the number of unemployed individuals who are actively seeking employment as a percentage of the labor force. When workers leave the labor force, they are no longer counted as part of the labor force or as unemployed, which decreases the unemployment rate. Choices B and C would either increase the labor force without immediately affecting employment numbers or increase the number of unemployed, thus not decreasing the U-3 rate.

Which of the Following Decreases the Official U-3 Unemployment Rate