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U.S. Bureau of Labor Statistics : Unemployment is 16.5% not 9.7%

July 9, 2009

The US government just published the Unemployment Rate, it’s 16.5% as per the U-6 measurement system. Why the U-3 is cited in the Media rather than the U-6 is nothing less than mind boggling.

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, as percent of the civilian labor force plus discouraged workers

U-5 Total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers

U-6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

NOTE: Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. For more information, see “BLS introduces new range of alternative unemployment measures,” in the October 1995 issue of the Monthly Labor Review. Updated population controls are introduced annually with the release of January data.

The U-6 is actually the closest to the unemployment rate that was accounted for during the great depression.

So why are they quoting the U-3 rather than U-6 ?

Someone answer that for me?

Written by TheFounder · Filed Under Advertising Agency News 


Comments

  • Jon
    "So why are they quoting the U-3 rather than U-6 ?"
    Because the BLS uses U-3, and they're apparently pretty knowledgeable about things like reporting labor and TRUE unemployment.

    Are the stay-at-home moms people you think should be counted in the unemployment rolls? They fall under U-6, but not U-3. U-4 through U-6 can be heavily influenced by market labor trends, business costs, etc. and are not indicative of wider economic issues. That's why the BLS doesn't use U-6, and that's why the media doesn't feel the need to report it. That's why economists aren't crying about it either.
  • 1 - Not all economists are happy with the U-3

    2 - the problem with the U-3 is when your benefits run out.. your not unemployed anymore.. even if you are looking for a job.

    3 - "BLS uses U-3, and they’re apparently pretty knowledgeable about things like reporting labor and TRUE unemployment." ----- Tell us more jokes... we like them.
  • Daniel Reeves
    "Tell us more jokes… we like them."

    Oooh, another person who probably hasn't even taken an introductory class on the subject that thinks he knows more than the collective wisdom of over 10,000 people who spend their entire lives studying this dismal, boring stuff.

    Jon is 100% right, by the way.

    If you want a measure that includes people who would like to work but aren't collecting benefits, use U-4. U-4 is a pretty good measure of unemployment too, although it isn't as reliable of an indicator of how bad the economy is as U-3, and it isn't as useful in conducting economic policy.
  • TheFounder
    Jon and Daniel ,

    Though I love the "Oooh, another person who probably hasn’t even taken an introductory class on the subject " .. the fact is that actually my degree is in Economics.... We won't discuss that I worked for Smith Barney for years ... took and aced my Series 7 ... and the oft endless tests... and for the record..the reason I am not in the industry is because years ago.... during the .com bubble.. I saw it heading for a crash...

    so I switched careers... and while half of wall street is contributing to the U-6 ... I'm still happily employed...

    In fact I really don't care what you guys think on this... mostly because the fact is that I'm right and both your positions are indefensible...

    Answer this question for me, tell me how they counted unemployment until 1994.... while you are dancing around with that question on why they changed it... and why it was modified from one system to another... and how it was "the right thing to do"

    Seriously... I would love to hear how just throwing 2000 conditions on unemployed people to not count them as unemployed will "show a more accurate number".....

    When your done, i'll make sure to print it off and frame it as the idiot of the week statement...
  • Great article - BLS should be retitled to simply BS

    It's the fox watching the hen house, both parties do it so this is not a partisan thing. The Fed needs to make things look as good or as bad as they feel necessary and from time to time the measurement instruments change.

    Today (Aug 7) was a great example of why U3 is such a bogus number. We had a NET loss of 267K jobs (247K non-farm) yet the unemployment rate got better...? Oh, this is because 637K folks were "dropped" from the labor pool so we are now better off. they are the experts, I guess I should just blindly trust them until I'm the last guy working and employment hits 100%.
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