To meet this increase in demand, businesses react by increasing their production capacity by investing in equipment to produce more of their product & support this increase in their production capacity businesses require more people, which forces them to hire more employees to fulfill the ongoing demand in an economy. The cyclical unemployment rate is the difference between the natural unemployment rate (unemployment due to workers coming and going or searching for other work) and the current rate (the total amount of unemployed). Finding the Cyclical Unemployment Rate . The formula is as follows: Cyclical unemployment rate = Current unemployment rate – (Frictional unemployment rate + Structural unemployment rate) One concrete example of cyclical unemployment is when an automobile worker is laid off during a recession to cut … The unemployment rate formula is the number of unemployed workers divided by the available civilian labor force at that time. Unemployment Rate is calculated using the formula given below Unemployment Rate = No. Hence, this results in an overall drop … It's difficult to look at data and determine why each person is unemployed. The formula for the cyclical unemployment rate accounts for the other two types of unemployment and the unemployment rate as well. of Employed Persons + No. Cyclical unemployment generally rises … determinant of the demand for labour from firms shows they perceive the state of the macroeconomy A worker must be older than age 16 and have been able and available to work full-time in the last four weeks to be considered unemployed by BLS standards. Cyclical unemployment rate = Actual rate - Natural rate of unemployment. Key Takeaways. of Unemployed Persons) Unemployment Rate = 90,000 / (1,150,000 + 90,000) Unemployment Rate = 7.26% In this phase of the business cycle, overall economic activity increase which represents the spike in the overall demand & consumer starts buying more items. of Unemployed Persons / (No. Cyclical unemployment is the impact of economic recession or expansion on the total unemployment rate.