Why is a 6% unemployment rate bad?

Question

I recently read news (that was presented in a very grim way) that a city’s unemployment rate rose to 6%.

So this means that out of all the people of working-age in that city, 94% of them were employed right?

Isn’t that a really good scenario? 94% is very close to 100% right?

I’m also surprised by this figure because the way the people are talking about the job market, it sounds like a huge number of people are unemployed and only a lucky few have jobs. Many people have said that about half of new-graduates cannot land their first job.

Am I missing something here?

In: Economics

Answer 1

6% isn’t bad. But lots of things require context and the composition of the unemployed also matters a lot. At the national level, an unemployment rate of 3.5%-4% is considered full employment (there are always people in transition). Many countries have far higher unemployment rates than 6% for decades and would love to have “only” 6% unemployment.