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Unemployment? U3? Do You Really Understand?

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July 31, 2009 – Comments (1)

The unemployment rate you see quoted in the press is the so-called “U3”. To answer your next question, there is indeed a U1, U2, U3, U4, U5, and a U6. Do you know the difference? To discover the difference, see:

http://www.bls.gov/webapps/legacy/cpsatab12.htm

 

U-1

Persons unemployed 15 weeks or longer, as a percent of the civilian labor force

U-2

Job losers and persons who completed temporary jobs, as a percent of the civilian labor force

U-3

Total unemployed, as a percent of the civilian labor force (official unemployment rate)

U-4

Total unemployed plus discouraged workers

U-5

Total unemployed, plus discouraged workers, plus all other marginally attached workers

U-6

Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons

 As of 7/31/09, U6 = 16.8%. U3 = 9.7%

So, when you see that the “official” employment rate is 9.7%, this is useful as a comparison to other periods and the current trend. However, currently, to accurately judge the impact of unemployment, you have to realize that 17% or about one person in six either has no job or is working only part time.

 

1 Comments – Post Your Own

#1) On August 01, 2009 at 2:11 AM, awallejr (81.24) wrote:

Except that U6 numbers inclusion of part time workers makes the stat itself open to too much interpretation.  U3 is crystal clear.  U6 you can have a household with 2 fulltime workers with one knocked down to part time (probably not an uncommon event right now).  Under that scenario, the household itself is most likely still solvent.

I can't tell you how many summers during my college days I had to work 2 part time jobs instead of one fulltime job.  And according to U6 definition per the BLS I would be unemployed.

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