If the GDP is growing too fast, it means primarily that consumers are spending a lot of money (because consumer spending makes up the majority of the GDP). As you have already learned, when a lot of people with a lot of money are trying to buy the same goods, this typically re­sults in inflation. (Recall that we discussed how on Valentine's Day roses are more expensive because more people want roses on that day). Things, in general, become more expensive when too many consumers have money (either money from their jobs or money they have bor­rowed) to buy these items.

Unemployment Rate

There are a certain number of people in the United States who have jobs (or the employed, as they are known) at any particular point in time. There are also a certain number of people who are actively seeking jobs (or the unemployed, as they are known). These numbers change from time to time, but in May 2001, the number of employed people stood at about 135,103,000 while the unemployed numbered 6,169,000. The Employment Report, published monthly by the U.S. Department of Labor, provides the employment and unemployment numbers. To­gether, the number of people employed and the number of people un­employed make up the labor force or workforce. The labor force num­ber was 141,272,000 in May 2001. The unemployment rate is the per­centage of the workforce that is out of work. In 2000, the unemploy­ment rate hit a landmark low of 4.1%—the lowest rate since 1970. The May 2001 unemployment rate was 4.4% (6,169,000 / 141,272,000). The highest unemployment rate at the time of this writing was 10.8% in 1982. The lowest unemployment rate was 2.5% in 1953.

People who are not employed and are not seeking employment are not counted as part of the workforce. Usually, rising employment and declining unemployment are signs of an improving economy.