Definition: Short-term unemployment that occurs when people are between jobs or entering the labor force.
Frictional unemployment is normal and even healthy—it reflects job search, career transitions, and matching workers to better positions. New graduates seeking first jobs, workers relocating, and people changing careers all contribute. Better job information (online listings) can reduce it, but some frictional unemployment always exists.
A software engineer quitting to find a better position is frictionally unemployed during their job search. A recent college grad applying to jobs experiences frictional unemployment.
Frictional unemployment is part of the natural rate. You
Category: Macroeconomics