Unemployment and the economy of a country go side by side. Unemployment is an economic phenomenon that can make or break an economy if not properly administered. Unemployment occurs when jobs aren’t available and a certain quantity of the labour force is not employed. Unemployment would increase as the economies go into recession in the light of downsizing etc. This phenomenon is a central problem, because when employment is lower, the country’s resources are exhausted and incomes are distressed. In such a turbulent time, the emotions and lives of individuals are also affected. The country that has been chosen to find availability of data sets between unemployment and economy is Pakistan. If was found out that substantial amount of data is present regarding the issues that are present in the country related to unemployment and its economy and vice versa. There are research papers, statistics, fact books and discussions taking place over the internet. A huge number of books discussing the situation of economy and unemployment have been published. However, the unemployment rate has been estimated over the last 15 years or so as there has been no official census that has taken place. To start off with, the latest estimate figures show that the country’s employment rate 7.4% (2009). This figure is an estimate; the figures show a gradual increase over the past 10 years. In 2008, 5.6% of the labor force was not employed. This jump has been attributed to the downturn in the economies all over the world, forcing the world economy into a recession. The impact of the economic cycle is evident in the estimated figures. This shows a clear relationship between the economy of the country and the employment that it is able to generate. This unemployment is increasing in both the rural areas and the urban areas of the country. With the inflation on the rise, the purchasing power of the local currency is deteriorating. This is an alarming signal in the light of the situation where the country is also under political turmoil and tops the list of the countries which are worst hit by terrorism. To cope up with all these problems at the same time, can be an impossible task. The market structures are inefficient; over the years there has been almost zero value addition in terms of technology development. (Ecosecretariat, 2009) The backbone of the country’s economy, textile, is under sever threat of close down due to power shortage. In such an economy, where consumerism was on the rise, people are now become conserved in their spending, as incomes are shrinking. Overall, as females are a welcome addition to the labor force, helping in increasing the disposable income of the family, there has been positive change in the urban area. Government should take measures to boost the agriculture sector of the country, to provide income to the rural class of the country. This should provide the country with the economic boost that would help to curb unemployment present in the country. The spillover effect would then be visible in years to come. International trade can only be increased, if textile is given the required stability. (Indexmundi, 2009) All in all, the country is in a dire need for sound policy development and implemen