Frictional unemployment.
In plain English
Frictional unemployment exists because matching a worker to a job takes time, even when the number of openings and the number of job seekers line up well. It is considered normal and even healthy, since it reflects people leaving jobs voluntarily for better ones and employers taking time to choose. Better job-matching tools and clearer information tend to shorten it. It rises modestly when many people feel confident enough to quit. Unlike the other types, nobody tries to eliminate it.
01Why it matters
Some of the unemployment in the reported rate is just people in transition, so a rate that never reaches zero is not a sign of a broken economy.
02The math, step by step
Say 2.4 million workers are between jobs in a labor force of 160 million. That is 1.5 percent of the labor force. If the total unemployment rate is 4 percent, frictional unemployment accounts for well over a third of it.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
Frictional unemployment assumes suitable jobs do exist and the search is still under way. When the openings genuinely are not there, that is cyclical unemployment. When they exist but require skills the worker lacks, that is structural.
04Receipts
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