U-3 and U-6 Unemployment rate.
For a number of years I have been tracking the monthly unemployment data. That information is shown in the graph above. Included is monthly information back to April 2010. Prior to that I only picked up a few data points.
This graph shows the hit from the Great Recession and the painfully slow recovery which followed.
This discussion will be posted on several of my blogs.
Six different ways to measure unemployment
There are actually six different ways to calculated labor underutilization, all provided by the US Bureau of Labor Statistics. The economic devastation caused by the shutdown of the US economy means we need to start looking at these different indicators.
The above graph shows what is referred to as the U-3 and U-6 rates.
“What in the world are you talking about,” I hear you ask.
The Bureau of Labor Statistics has a great chart, Table A-15. Alternative measures of labor underutilization.
The table provides the following description of six different ways to measure the amount of labor that is not laboring:
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 (this is the 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 persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force (i.e. marginally attached)
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force (i.e. involuntary part time)
Table also provides this additional explanation:
NOTE: Persons marginally attached to the labor force are those 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 past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. 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. Updated population controls are introduced annually with the release of January data.
The U-6 does not include people who have dropped out of the workforce. Those are people who have stopped looking for work. This early in our current disaster, I am guessing there are not any people that have dropped out, since unemployment benefits are still running.
During the Great Recession there was some group of people who had exhausted unemployment benefits and weren’t even trying to find a job because there were none to be had. Those folks weren’t included in the above tally. Some number of months down the road we will again see people that drop out and thus will disappear from all of the measurements.
U-1 through U-6 rates for last four months
To see the full extent of the unemployment mess we need to look at the range of all U- measures.
Here’s information for the last four months:
|measure||Jan 20||Feb 20||Mar 20||Apr 20|
The headline number is U-3. It has risen from mid-threes in recent months to 4.4 in March and a whopping 14.7 in April. We can expect it to grow again in May.
The horrifying number is U-6. This broadest measure which includes people involuntarily working part-time was running in the sevens for quite a while and had dropped down to the high sixes lately. It has exploded to 22.8%.
That means that over 1/5th, approaching 1/4th, of American workers who want to work full-time are working at less than full-time hours or actually out of a job. That is a staggering loss of productivity and output. Oh yeah, and a staggering loss of income to their families.