The formula used to determine the unemployment rate.
The unemployment rate can be defined as the percentage of the unemployed labor force, or they are jobless. The unemployment rate is mostly used as the lagging indicator depending on the fluctuating economic situation. It is important to note that the unemployment rate is the percentage of adults in the unemployed labor force but not the total unemployed adult population. Unemployment can, therefore, be determined by dividing the total number of jobless adults in the labor force by the total number of adults in the labor force and multiplying the value to a hundred. The formula can be represented as;
Unemployment rate= (Unemployed people/Total labor force) ×100
How inflation is measured using the Consumer Price Index (CPI).
Inflation is measured using the CPI. The change over the index in terms of percentages over time determines the inflation amount during a specific period, for example, when the prices of the consumable goods increase. The formula used for calculating the Consumer Price Index (CPI) for a single product is;
CPI= (Cost of Market Basket in Base Year /Cost of Market Basket in Given Year)×100
There are two renowned types of CPI, which are the CPI-W, which primarily measures the CPI for urban wage earners and the clerical staff, while the CPI-U is the CPI for the urban consumers.
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