Cyclical Unemployment

Cyclical unemployment is the one that we are normally afraid of. If an economy goes into a recession, there is naturally less mand which means fewer employees needed to meet lower level of demand. Cyclical unemployment is so called because it is caused by the short term business cycle - not because it compounds on itself. To try and avoid this, the central bank is tass with, among other things, maintaining full employment. But that role can sometimes be at odds with another responsibility of the fed, which is maintaining low inflation. The naru is just an acronym for the non accelerating inflation rate of unemployment. This is why economists don't want zero unemployment.