The unemployment rate is the ratio of unemployed people to the number of total people in the workforce.
It does not include people who are not in the workforce (children, seniors, and people unable to work or not seeking employment).
A low unemployment rate means that there are few people searching for work, while a high unemployment rate means that more people are searching for work.
Unemployment Rate = (Number of Unemployed / Number in the Labor Force) x 100%
If there are 100,000 unemployed people, and the labor force is 5,000,000 people, then:
Unemployment Rate = (100,000 / 5,000,000) = 0.02 x 100% = 2.0%
Therefore, the unemployment rate is 2.0%.