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The labor force does not include full time students, homemakers, retirees, or discouraged workers; those who have given up looking for work.
The reason why it is important to macroeconomics is because first off it is a measure of overall performance of an economy. Labor is the “chief resource” of any economy and in order to measure the efficiency of an economy it is imperative to know how well the economy is using the resources. Policymakers looking to influence the economy are greatly concerned with the unemployment rate because if individuals cannot find jobs they subsequently will be spending less money and since expenditures of one are the incomes of others, declining consumption contributes to declining GDP...
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