Unemployment, also called joblessness, occurs when people are without work and are actively seeking employment. Unemployment is measured in order to determine the unemployment rate. The rate is a percentage that is calculated by dividing the number of unemployed individuals by the number of individuals currently employed in the labor force. Measuring the unemployment rate requires identifying who is in the labour force. The labour force includes people who are either employed or unemployed. Figuring out who is employed or unemployed involves making practical judgements, such as how much paid work someone needs to undertake for them to be considered as having a job, as well as actually counting how many people have jobs or not.

0% unemployment is not the goal because the only way an economy could have a 0% unemployment rate is if it is severely overheated. Even then, wages would probably rise before unemployment fell to absolute zero. Zero unemployment is unattainable because employers would raise wages first. A 0% Jobless Rate could kick up inflationary pressure. Inflation and the unemployment rate are inversely correlated. The logic is this: High wage inflation is often considered a proxy for the general inflation level.