How does GDP growth affect unemployment?

How does GDP growth affect unemployment?

GDP growth can have an impact on unemployment. When the economy is growing and GDP is increasing, businesses tend to expand and create more job opportunities. This can lead to a decrease in unemployment rates as more people are able to find employment. Conversely, during periods of low or negative GDP growth, businesses may cut back on hiring or even lay off workers, resulting in higher unemployment rates. Therefore, a higher GDP growth rate is generally associated with lower unemployment rates, while lower GDP growth rates can contribute to higher unemployment rates.