3 ms·

the article suggests a simple explanation: > "Perhaps the job market wasn’t as good as the unemployment rate made it look." so basically, the politically expe

the article suggests a simple explanation: > "Perhaps the job market wasn’t as good as the unemployment rate made it look." so basically, the politically expedient version of unemployment, u3, doesn't have explanatory power in the economy. instead we should use u6, which includes the underemployed and the discouraged [0]. so the slack of the un-/under- employed has now been eaten up and competition in the labor force is driving up prices. [0] https://en.wikipedia.org/wiki/Unemployment#cite_ref-47 https://en.wikipedia.org/wiki/Unemployment#cite_ref-47

makomk 8y ago
Unfortunately, all the self-proclaimed fact checkers spent the last presidential election campaign bravely defending democracy by insisting that U3 was the one true measure of unemployment and that anyone who didn't believe what it said was a filthy liar.
tootie 8y ago
U1 through U6 all move in absolute lock step with each other. https://upload.wikimedia.org/wikipedia/commons/thumb/9/9b/US_Unemployment_measures.svg/220px-US_Unemployment_measures.svg.png https://upload.wikimedia.org/wikipedia/commons/thumb/9/9b/US...
- strken 8y ago
  Perhaps there's a magic number which is the unemployment rate in a healthy economy[0], and when you get close to that magic number then competition has a much greater effect. If you think the magic number is very small, say 2%, then the choice between U1, U3, and U6 obviously affects whether you've hit it or not. [0] perhaps mean_time_to_find_job / (mean_time_to_find_job + mean_job_duration + mean_time_not_working), or something
  - gizmo686 8y ago
    If there is such a number (which there almost certainly is; literal 0 unemployment strikes me as very unhealthy), then you obviously need to specify which version of unemployment you are stating it against. As long as they continue to move in lock-step, they are effectivly measuring the same thing.
  - tootie 8y ago
    It's a well-studied area of economics. The term is "Full Employment" https://en.wikipedia.org/wiki/Full_employment https://en.wikipedia.org/wiki/Full_employment

makomk 8y ago

Unfortunately, all the self-proclaimed fact checkers spent the last presidential election campaign bravely defending democracy by insisting that U3 was the one true measure of unemployment and that anyone who didn't believe what it said was a filthy liar.

tootie 8y ago

U1 through U6 all move in absolute lock step with each other. https://upload.wikimedia.org/wikipedia/commons/thumb/9/9b/US_Unemployment_measures.svg/220px-US_Unemployment_measures.svg.png https://upload.wikimedia.org/wikipedia/commons/thumb/9/9b/US...

strken 8y ago
Perhaps there's a magic number which is the unemployment rate in a healthy economy[0], and when you get close to that magic number then competition has a much greater effect. If you think the magic number is very small, say 2%, then the choice between U1, U3, and U6 obviously affects whether you've hit it or not. [0] perhaps mean_time_to_find_job / (mean_time_to_find_job + mean_job_duration + mean_time_not_working), or something
- gizmo686 8y ago
  If there is such a number (which there almost certainly is; literal 0 unemployment strikes me as very unhealthy), then you obviously need to specify which version of unemployment you are stating it against. As long as they continue to move in lock-step, they are effectivly measuring the same thing.
- tootie 8y ago
  It's a well-studied area of economics. The term is "Full Employment" https://en.wikipedia.org/wiki/Full_employment https://en.wikipedia.org/wiki/Full_employment