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US broad unemployment rate

This page is about the broadest measure of unemployment, U-6. Note that the data series is not followed here.

Summary

4 Aug 2009.

U-6 includes all the people who are looking for full-time work but are unable to find it: the 'Unemployed' (must have looked for work in the previous 4 weeks), the 'Marginally attached' (looking for work but not in the last four weeks), and those working 'Part-time for economic reasons' (i.e. part-time but wanting full-time). From 1994, when the measure was instituted, to 2008, the range was about 7% to 12%. This measure is probably very important to watch for the long term economic health of the nation, and for social policy, but not for investing, as changes in U-6 are broadly parallel to changes in U-3. The economic-cycle variation in the number of those working part time for economic reasons is about five-fold greater than the variation in those marginally attached. The former is worth watching separately, as a leading indicator on both employer sentiment and worker income.

Highlights

Entries below covered through 4 Aug 2009:

  • Components (4 Aug 2009) 'Part time for economic reasons' make a 5x more significant contribution to the variation in U-6 than does 'marginally attached'.
  • Longer term (4 Aug 2009) (See graph in Jun 2008 entry.) From 1994, when the measure was instituted, to mid-2008, the range was about 7% to 12%. Over the period 1994 to 2008, the graphs of U-3 and U-6 were broadly parallel.
  • US unemployment background (11 Jul 2009) Most reported unemployment statistics are from the Bureau of Labor Statistics in the Department of Labor. All the BLS unemployment data are from the Current Population Survey, a monthly survey of a probability sample of approximately 60,000 households, conducted by the Bureau of the Census for the BLS. Data are collected by personal and telephone interviews. Response is voluntary, but only about 4% refuse. Roughly speaking, the BLS divides the population into the “Employed” (E), the “Unemployed” (U; must have looked for a job in the last four weeks), the “Marginally attached” (M; looking for a job but not in the last 4 weeks), those not looking for a job at all (N), and the institutionalized. The unemployment rate usually reported is U-3, including just the Unemployed (U / E + U). There is also a broader measure of unemployment, U-6, which includes the Unemployed, those working part-time for economic reasons (i.e. wanting full-time ; PTER), and the Marginally attached; these are all the people who are looking for full-time work but are unable to find it (U + PTER + M / E + U + M). There is one other statistic of interest, the “Not employed”. This includes those who are not looking for work (NLFW; so U + M + NLFW / E + U + M + NLFW). The survey questions and the definitions have changed over time. Probably the official unemployment rate has been pretty stable over time but, strictly speaking, current data is only comparable to data back to Jan 1994.

Sources

  • http://www.bls.gov; tab for Databases and Tables; heading “Unemployment”; line “Labor Force Statistics including the National Unemployment Rate”, click on “Top picks”, then choose “Alternative measure of labor underutilization U-6” near the bottom.

See also

Comparison of different unemployment rates 1998 - 2008

Jun 2008. Issues in Labor Statistics

http://www.bls.gov/opub/ils/pdf/opbils67.pdf

“The Unemployment Rate and Beyond: Alternative Measures of Labor Underutilization”

Definition of the different unemployment measures

3 Jul 2008. BLS web site

http://www.bls.gov/news.release/empsit.t12.htm

(On the home page select Employment Situation for the current release; scroll down to the bottom and select 'Table A-12'. The definitions are part of the presentation of results.)

[U-3 is the standard unemployment rate; U-6 is the broadest]

“Table A-12. Alternative measures of labor underutilization (Percent)”

  • 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 a 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 currently looking 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 further information, see “BLS introduces new range of alternative unemployment measures,” in the October 1995 issue of the Monthly Labor Review.”

(See also Monthly Labor Review, Apr 2002, http://www.bls.gov/opub/mlr/2002/04/art3full.pdf, for a longer discussion of the alternate measures and how they've changed over time.)

Part time for economic reasons outweighs marginally attached

4 Aug 2009. CPS table A-12.

From the BLS home page www.bls.gov, choose tab “Databases and tables”; under the heading “Unemployment”, at the line “Labor Force Statistics including the National Unemployment Rate”, click on “Top picks”; Near the bottom of the page, tic 'Persons At Work Part Time for Economic Reasons', 'Marginally attached to labor force', and retrieve data. Then “more formatting options”.

Range Marginally attached Part time for economic reasons
Min 2000 - 2008 1,044,000 3,144,000
Max 2000 - 2008 1,908,000 8,038,000
Max - Min 864,000 4,894,000