The goal of the research – the analysis of interconnection between unemployment and real volume of national production in Latvia, as well as estimate of the retardation of actual GDP from the potential value. By using the statistical data of Latvia and analysis thereof, the average annual absolute losses of production are shown. Methods of the research are mathematical modeling and the statistical calculations. Unemployment slows down the development of economy and society in whole. To reach full employment and volume of production, the state should elaborate a certain economical policy, create favorable conditions for business.