MODELLING AND FORECASTING UNEMPLOYMENT RATES IN NIGERIA USING ARIMA MODEL

Unemployment rate is a big macroeconomic issue of our time. Unemployment disrupts lives and is associated with an irrecoverable loss of real output. This paper aims to modeling and forecast the evolution of unemployment rates in Nigeria using ARIMA model on annual data for the period of 1972 to 2014. The Augmented Dickey-Fuller (ADF) test for unit root was carried out on the unemployment rate time series, the result revealed a stationary time series at first difference. The empirical study revealed that the most adequate model for modelling and forecasting the unemployment rates within this period in Nigeria is ARIMA (2,1,2). The forecast of unemployment rate in Nigeria revealed an increasing rate from 2015 to 2017 while a slight decrease in 2018. During this period of 2015 to 2018 unemployment rates is still very high in Nigeria. This present administration should focus on capital project that has the capacity to create employment.