A machinist loses her job when the plant closes. She files for benefits, updates her resume, and starts applying. Until she finds work, she counts as unemployed. Economists measure unemployment as the share of the labor force that is jobless but actively looking. People who have stopped searching are not counted, which is why the headline rate can fall even when times are tough.

Not all unemployment is the same. Frictional unemployment comes from the normal churn of people moving between jobs. A recent graduate searching for a first position falls into this category. Structural unemployment is deeper: the skills workers have no longer match the jobs available, as happened to coal miners in Britain and factory hands in the American Midwest. Cyclical unemployment rises and falls with the business cycle, spiking during recessions and shrinking during booms.

The costs go beyond lost paychecks. Long spells out of work erode skills and confidence. Communities lose tax revenue. Children in households with unemployed parents often do worse in school. Economists debate how much unemployment is unavoidable. Most put the natural rate somewhere between 4 and 5 percent for a healthy economy.

Types of unemployment

• Frictional: between jobs
• Structural: skills mismatch
• Cyclical: tied to downturns
• Seasonal: predictable shifts, like farm work in winter