It is the percentage of people not working who are actively seeking work. It is not just the percentage of people that are not working. If someone gives up looking for a new job, they cease to be counted among the “unemployed.” That’s a major reason why, despite its prominence, the unemployment rate can be somewhat misleading. Economists also look at the “labor force participation rate” which measures how the percentage of adults that are either employed or are actively looking for work. Since the financial crisis, the unemployment rate has recovered to go back down to a very low level but the participation rate remains historically quite low: that suggests that are actually more people who could be working but aren’t (and those people could ‘re-enter’ the labor force if employment opportunities arise).