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Unemployment < 4% is basically full employment. People that are changing jobs are temporarily unemployed. Another metric you can use to reach the same conclusio

Unemployment < 4% is basically full employment. People that are changing jobs are temporarily unemployed. Another metric you can use to reach the same conclusion is that # of job openings > unemployed work force

IncRnd 5y ago
That's U-3. U-6 is at 7.2%. In general the claim that many people are not returning to work after COVID lockdowns is true. The reasons are up for debate, but that's not the point. The U-3 rate is an artificial rate to claim as the truth. That's moving the goal posts in order to get the win. Plus there are a record number of unfilled job openings.
- deleted 5y ago
  [deleted]
- hn_throwaway_99 5y ago
  Your argument is a non sequitur to me: > Plus there are a record number of unfilled job openings. Yes, which would basically imply that it's incredibly easy for anyone who wants a job to get one.
  - IncRnd 5y ago
    > Your argument is a non sequitur to me: For something to be a non sequitur, it must be a non sequitur to everyone, not just to one. This is not a non sequitur for two reasons. 1) The sentence you quoted was not intended to be a consequence of the earlier statement. Unemployment rate and number of job openings are connected, but not as you believe. Correlation is not causation. You are drawing inferences without cause. 2) Full employment depends upon the number of job openings as well as the unemployment rate, which you ignored from my comment. > Yes, which would basically imply that it's incredibly easy for anyone who wants a job to get one. No. That is your inference but is clearly not implied.
- bskap 5y ago
  U-6's 7.2% is compared to 7.0% in February 2020 and 8.1% in February 2007. So even that is similar to pre-Covid levels and better the the peak before the last recession.
  - IncRnd 5y ago
    How does that apply to full employment?
    - bskap 5y ago
      The 5% = full employment threshold has always been calculated based on U3. That's what they measured to come up with that estimate. If you want to talk about how U6 is better, then you need to compare it to previous U6 measurements, not previous U3 measurements. If, as you were implying, U3 was hiding extra unemployment right now but U6 was more accurate, then it wouldn't be so closely tracking U3.
  - deleted 5y ago
    [deleted]
AceJohnny2 5y ago
How is "unemployment" defined in the US? Take those numbers with a grain of salt. In France, you were counted as "unemployed" if you were registered with the national employment agency and actively looking for employment according to their criteria. If you didn't find anything (for example because the opportunities on offer were too far away, or various other reasonably human reasons) after a certain time, the agency dropped you, and you were no longer part of the "unemployed" statistic. Unemployment went down! I've also seen the government there change their criteria for unemployment (for example dropping you after 9 months instead of 12), to make it seem like unemployment went down. (I'm a big believer in statistics-driven policies, but statistics, like anything involving humans, can be corrupted)
- IncRnd 5y ago
  That's very astute of you. The GP was talking about a rate called U-3, but the U-6 rate is far more descriptive. U-3 is what is generally used as the quoted rate, because it severely minimizes actual unemployment, allowing the Federal Government to use false statistics. [1] [1] https://www.bls.gov/news.release/pdf/empsit.pdf https://www.bls.gov/news.release/pdf/empsit.pdf
  - alexilliamson 5y ago
    I'm glad someone else got on this soap box today. Folks will bend over backwards to justify the U-3 rate when it's not that meaningful at all.
    - xxpor 5y ago
      It's extremely meaningful. It measures those who are unemployed. U-6 counts underemployment and people not actively searching due to an "economic reason". Even regardless, the current U-6 rate is very close to the record low: https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE
- bskap 5y ago
  The US uses a large-scale survey for unemployment rather than tying it to the unemployment process. The official definition most people quote is based on responses to the survey of "have not worked recently, have looked for work recently" but there are also broader measures of unemployment that count people who want to work even if they haven't looked, as well as people working part time who want to work full time. Using even the broadest measure of unemployment[1], numbers are back down where they were before Covid. The labor force participation rate is still down though[2] which means that about 2% of US adults aren't looking to go back to work at all- many of them are likely now retired, students, or stay-at-home parents. [1] https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE [2] https://fred.stlouisfed.org/series/CIVPART https://fred.stlouisfed.org/series/CIVPART

IncRnd 5y ago

That's U-3. U-6 is at 7.2%. In general the claim that many people are not returning to work after COVID lockdowns is true. The reasons are up for debate, but that's not the point. The U-3 rate is an artificial rate to claim as the truth. That's moving the goal posts in order to get the win. Plus there are a record number of unfilled job openings.

deleted 5y ago
[deleted]
hn_throwaway_99 5y ago
Your argument is a non sequitur to me: > Plus there are a record number of unfilled job openings. Yes, which would basically imply that it's incredibly easy for anyone who wants a job to get one.
- IncRnd 5y ago
  > Your argument is a non sequitur to me: For something to be a non sequitur, it must be a non sequitur to everyone, not just to one. This is not a non sequitur for two reasons. 1) The sentence you quoted was not intended to be a consequence of the earlier statement. Unemployment rate and number of job openings are connected, but not as you believe. Correlation is not causation. You are drawing inferences without cause. 2) Full employment depends upon the number of job openings as well as the unemployment rate, which you ignored from my comment. > Yes, which would basically imply that it's incredibly easy for anyone who wants a job to get one. No. That is your inference but is clearly not implied.
bskap 5y ago
U-6's 7.2% is compared to 7.0% in February 2020 and 8.1% in February 2007. So even that is similar to pre-Covid levels and better the the peak before the last recession.
- IncRnd 5y ago
  How does that apply to full employment?
  - bskap 5y ago
    The 5% = full employment threshold has always been calculated based on U3. That's what they measured to come up with that estimate. If you want to talk about how U6 is better, then you need to compare it to previous U6 measurements, not previous U3 measurements. If, as you were implying, U3 was hiding extra unemployment right now but U6 was more accurate, then it wouldn't be so closely tracking U3.
- deleted 5y ago
  [deleted]

AceJohnny2 5y ago

How is "unemployment" defined in the US? Take those numbers with a grain of salt. In France, you were counted as "unemployed" if you were registered with the national employment agency and actively looking for employment according to their criteria. If you didn't find anything (for example because the opportunities on offer were too far away, or various other reasonably human reasons) after a certain time, the agency dropped you, and you were no longer part of the "unemployed" statistic. Unemployment went down! I've also seen the government there change their criteria for unemployment (for example dropping you after 9 months instead of 12), to make it seem like unemployment went down. (I'm a big believer in statistics-driven policies, but statistics, like anything involving humans, can be corrupted)

IncRnd 5y ago
That's very astute of you. The GP was talking about a rate called U-3, but the U-6 rate is far more descriptive. U-3 is what is generally used as the quoted rate, because it severely minimizes actual unemployment, allowing the Federal Government to use false statistics. [1] [1] https://www.bls.gov/news.release/pdf/empsit.pdf https://www.bls.gov/news.release/pdf/empsit.pdf
- alexilliamson 5y ago
  I'm glad someone else got on this soap box today. Folks will bend over backwards to justify the U-3 rate when it's not that meaningful at all.
  - xxpor 5y ago
    It's extremely meaningful. It measures those who are unemployed. U-6 counts underemployment and people not actively searching due to an "economic reason". Even regardless, the current U-6 rate is very close to the record low: https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE
bskap 5y ago
The US uses a large-scale survey for unemployment rather than tying it to the unemployment process. The official definition most people quote is based on responses to the survey of "have not worked recently, have looked for work recently" but there are also broader measures of unemployment that count people who want to work even if they haven't looked, as well as people working part time who want to work full time. Using even the broadest measure of unemployment[1], numbers are back down where they were before Covid. The labor force participation rate is still down though[2] which means that about 2% of US adults aren't looking to go back to work at all- many of them are likely now retired, students, or stay-at-home parents. [1] https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE [2] https://fred.stlouisfed.org/series/CIVPART https://fred.stlouisfed.org/series/CIVPART