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Every month, the government sorts millions of Americans into three groups:

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employed, unemployed, or not in the labor force.

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By the end of this video, you'll know exactly how each person gets placed, including the tricky cases.

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The survey covers civilians age 16 and over, with no upper age limit, but skips people in institutions like prisons or nursing homes, and active-duty military.

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Everyone left falls into exactly one group.

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The employed and unemployed together form the labor force.

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Everyone else is not in the labor force.

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Most people are easy to classify.

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Elena worked 40 hours last week as a sales manager, so she's employed.

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Steve lost his factory job and has been contacting businesses for work, so he's unemployed.

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Linda stays home with her kids and isn't job hunting, so she's not in the labor force.

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You're employed if you did any paid work at all during the survey week, part-time or temporary included.

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You also count if you have a job but were away from it, paid or not.

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That covers vacation, illness, child care problems, parental leave, a labor dispute, or bad weather.

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Some people work without pay and still count as employed.

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If you work 15 hours or more a week in a family business or farm run by a relative you live with, you're an unpaid family worker.

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Garrett, 16, does about 20 hours of chores on his parents' farm, so he qualifies.

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To be unemployed, you must pass three tests.

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First, you have no job.

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Second, you actively looked for work in the prior four weeks.

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Third, you're available to start now.

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Miss any one, and you're not counted as unemployed.

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Not every kind of looking counts.

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Active search could connect you with an employer:

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contacting employers, agencies, friends or school career centers, sending résumés, or answering job ads.

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Passive search, like taking a training course or just reading job postings, doesn't count.

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Interviewers never ask whether you're unemployed;

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your answers decide.

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They ask if you did paid work last week, then whether you had a job you were away from or were on layoff.

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If not, they ask whether you looked for work in the last four weeks, and how.

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Finally:

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could you have started a job last week?

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There's one exception to the search rule.

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If you're on layoff and expect to be recalled, because you have a return date or an indication of recall within six months, you're unemployed even without

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looking.

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Marcus, waiting out an auto plant's model changeover, counts as unemployed.

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Yvonne applied at a bank two weeks ago and can start, so she's unemployed.

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John searched for weeks but had the flu last week;

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temporary illness is allowed, so he's unemployed too.

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Katherine only thought about looking, so she's not in the labor force.

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Julia applied for summer jobs but can't start until June, so she isn't either.

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Many people assume the unemployed are just people who lost their jobs.

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In fact, the count also includes people who quit to find other work, workers whose temporary jobs ended, first-time job seekers, and people returning to

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work, like parents once their kids start school.

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Another common belief is that students are automatically outside the labor force.

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Not so.

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Students are treated like anyone else:

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full-time or part-time, they're employed or unemployed if they meet the criteria.

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People with no job who aren't looking are not in the labor force, often because of school, retirement or family duties.

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Since the mid-1990s, fewer than one in ten have said they want a job.

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Those who want one, looked in the past 12 months, and are available are called marginally attached.

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Discouraged workers are a subset of them.

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Discouraged workers have stopped looking for specific reasons.

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They believe no job is available in their field or area, or they couldn't find work before.

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Others feel they lack the training or experience, or that employers see them as too young, too old, or face other discrimination.

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Sometimes a person does several things in one week, but they can only be counted once.

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So there's a priority order.

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Working or having a job beats looking for work,

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and looking for work beats non-labor force activities like going to school.

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James works after school, so he's employed;

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Elyse is job hunting, so she's unemployed.

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Megan interviewed for a better job on her lunch break, but she's employed.

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Mike was on strike while seeking temp work, still employed.

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Avery lost her job midweek but worked three days, so she's employed too.

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These groups feed the key statistics.

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The labor force is the employed plus the unemployed.

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The unemployment rate is the unemployed as a share of the labor force.

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The participation rate is the labor force as a share of the population 16 and over,

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and the employment-population ratio is the employed as a share of that population.

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So remember:

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people with jobs are employed, even if temporarily away.

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People without jobs who actively looked and can start are unemployed, plus those awaiting recall from layoff.

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Everyone else is not in the labor force.

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And when activities overlap, working comes first.