Unemployment has three categories - frictional from job searching, structural from skill/job mismatches, and institutional from policies like minimum wage - which together are considered the natural rate of 5-6%. The measured unemployment rate minus the natural rate is defined as cyclical unemployment.

21. CATEGORIES OF UNEMPLOYMENT:
frictional (still looking)
plus structural (a mismatch)
plus institutional (minimum wage)
=NATURAL RATE = 5% to 6%

22. THE RESIDUAL CATEGORY:
Measured Rate of Unemployment
minus the Natural Rate
=CYCLICAL UNEMPLOYMENT