What type of unemployment occurs in the downswing of an economy between two boom periods?

Cyclical unemployment occurs as a result of economic downturns or recessions, which align with fluctuations in the business cycle. During the downswing of an economy, businesses face reduced demand for goods and services, often leading to layoffs and a contraction in the workforce. This type of unemployment is directly linked to the performance of the economy—when the economy is booming, hiring might increase; when it is in decline, escaping from this type of unemployment can be challenging for workers until the economy recovers.

In contrast, frictional unemployment pertains to the transition between jobs and occurs when individuals are searching for new employment after leaving a previous job. Transitional unemployment may refer to short-term periods of adjustment, while structural unemployment results from shifts in the economy that may render certain skills obsolete, such as technological advancements or changes in consumer demand. Understanding the specificity of cyclical unemployment in relation to the broader economic context is crucial for grasping how various forms of unemployment relate to different economic phases.