7 ms·

The BLS puts out 6 different unemployment statistics for every period. U3 is the "official rate", but you can also look at the other ones, including U4 = U3 + "

by me2i81 12y ago

The BLS puts out 6 different unemployment statistics for every period. U3 is the "official rate", but you can also look at the other ones, including U4 = U3 + "discouraged workers", U5 = U4 + "marginally attached" workers, U6 = U5 + part time workers who would like to be full time. You can make arguments about which measurement is "right", but putting out an editorial implying that there is sleight-of-hand going on is silly--all the measurements are available, and comparing a single one to itself over time as a "headline rate" is completely reasonable.

MayanAstronaut 12y ago
Very true, every stat has issues. Take payroll of population that this CEO thinks is a better metric. It totally ignores demographics of a aging population. Baby-boomers are retiring, how a metric based CEO ignores this shows were the real bias is.
- shubb 12y ago
  Uh, this metric is nuts, because it views anything that isn't 9-5 on a payroll as 'not a real job'. That ignores everything from independent contractors to seasonal work. These are huge components of the economy and always have been. So what does a movement in the metric even mean? Does it mean that people are working less, or does it mean that more people are self employed? Or students longer? I think wages are a more insightful way of estimating labor supply and demand. It's not great news: "U.S. real (inflation adjusted) median household income was $51,939 in 2013 versus $51,759 in 2012, statistically unchanged. The 2011 level was $51,842 and the 2010 level was $52,646. In 2013, real median household income was 8.0% lower than the 2007 pre-recession level of $56,436.[1]" (wikipediarite)
saosebastiao 12y ago
But if that U3 metric doesn't describe what normal people feel (the sort of people that don't know the difference between U3 and U6), then there is an argument for calling its "official" designation a sleight of hand. The U6 metric counts underemployment as unemployment. This reflects the common sentiment in the media, and it obviously shows a lack of recovery where other metrics have fully recovered by now.
- sanderjd 12y ago
  I would be very interested in knowing the history / politics / whatever of how U3 became the "official" measure, what that really means, and what the arguments are for and against its continued use. For instance, most people (the vast majority, anecdotally) don't have any idea that there are multiple measures, and what the one they always hear about does and doesn't include. I've never heard the terms U3, etc. used on the television news or seen them on the front page of the NYT. Why is that? I doubt it's some conspiracy, but I'm genuinely curious how we got here, why we're still here, and whether we should instead be somewhere else.
  - med00d 12y ago
    I'm not sure how or why that became the standard, but it's the standard per the International Labour Organization. The U6 rate only started being recorded in 1994.
    - me2i81 12y ago
      U3 data goes back to 1890. There's always someone, usually in an opposing political camp, who says "it's misleading" when it goes down, or when it goes up. Both the left and the right have done this sort of handwaving over the years, but having a stable statistic that goes back many decades is useful even if you want to look at others for a more complete picture about what's going on. On some planet having U6 go from above 17% to just over 11% from 2009 to the present counts as "failed recovery" but I'm not quite sure how. You could argue that there's a bit of a gap there, like around 1.5% if you look at recent history, and maybe even argue that it's structural, i.e. that information technology is causing full-time work to go away, etc. but that's a technical argument to have, which would require looking at a lot of data and not just trying to score points by cherry-picking.
      - med00d 12y ago
        >On some planet having U6 go from above 17% to just over 11% from 2009 to the present counts as "failed recovery" but I'm not quite sure how. Agreed. I argue this point all the time, actually. I think it's interesting to go back through and look at how unemployment fairs in comparison to the political party of the president during that time. Looking at the U3 rate for the past 50 years, unemployment has only gone down once under a republican president (Reagan) and Carter is the only democrat in the past 50 years who didn't see unemployment drop from the time he took office to the time that he left office.
deleted 12y ago
[deleted]
forgottenpass 12y ago
Ha, I came here to make the same comment. Anyone who writes about the misleading nature of U3 without describing U6 exists, is a BLS reported figure, and that there is no prefect definition of "unemployed" is a hack. There is plenty of bad reporting out there (including "analysis" from political talking heads that don't know the difference between U3 and U6), but U3 is like the snow forcasts for NY last week. If you don't care to look beyond the surface level, don't be surprised when a wide-breadth news establishment only gives the basics. If anyone reading wants to see U6, or just doesn't know about raw data on FRED, go look at it [1]. [1] https://research.stlouisfed.org/fred2/graph/?chart_type=line&recession_bars=on&log_scales=&bgcolor=%23e1e9f0&graph_bgcolor=%23ffffff&fo=verdana&ts=12&tts=12&txtcolor=%23444444&show_legend=yes&show_axis_titles=yes&drp=0&cosd=1948-01-01%2C1948-01-01&coed=2014-12-01%2C2014-12-01&width=670&height=445&stacking=&range=&mode=fred&id=UNRATE%2CU6RATE&transformation=lin&nd=&ost=-99999&oet=99999&scale=left&line_color=%234572a7&line_style=solid&lw=2&mark_type=none&mw=1&mma=0&fml=a&fgst=lin&fgsnd=2007-12-01&fq=Monthly&fam=avg&vintage_date=&revision_date= https://research.stlouisfed.org/fred2/graph/?chart_type=line...
- vitd 12y ago
  Serious question - looking at the graph, it looks like the disparity between U3 and U6 jumped quite a bit in 2009 and is just starting to get back the historical difference today. Do you think it was valid to be concerned about the disparity increasing by so much in 2009? That part does strike me as a little worrying, though it is coming back in line now, which seems good.
  - skolor 12y ago
    The difference looks fairly consistent: Febuary 1995: U6 is 183% of U3. Febuary 2000: U6 is 175% of U3. Febuary 2004: 173% Febuary 2006: 155% Febuary 2007: 182% March 2008: 178% Febuary 2009: 183% March 2010: 172% Febuary 2011: 177% Febuary 2012: 180% March 2013: 184% Febuary 2014: 188% There quite a bit of variance, but it seems to be seems to have been consistently in the 170-185%, with a few outliers.
  - grayclhn 12y ago
    Steep changes in the slope can introduce visual distortions when you compare the gap between two series. If you download and plot the difference, I think you'll see less of a change.
nkozyra 12y ago
Yes, it's like people think they've stumbled upon something novel by "exposing" the definition of the U3, which has been in place and largely unchanged for a long time. It would be equally "misleading" to just say 11% of people are unemployed by using the U6. There's nuance to these numbers. This article calls the official unemployment rate "misleading." That's moronic. It's explicitly detailed and if you prefer to use a different metric, do so. The value of the # is not the specific percentage itself, it's the trend. Follow any trend you like, they've all had a similar trajectory the last few years.
- Terr_ 12y ago
  I think it's the difference between "This is intrinsically misleading" versus "People who want to mislead you may use this when they try".
  - niels_olson 12y ago
    > This is intrinsically misleading Exactly. Reporting the same number over time sounds very serious and correct, unless the nature of the market itself is what changed. In which case the reporting may totally miss the real event worth reporting. That said, the conversation here is rich in part because at least people are aware that the underlying market may have changed.
    - Terr_ 12y ago
      > Exactly. Wait... exactly what? I'm confused because the "quote" you're using from my post is (ironically?) deeply misleading.
      - niels_olson 12y ago
        Reporting U3, or any other number, as "the unemployment rate" is intrinsically misleading if the underlying reality has changed. The system under discussion is not a physical system that we are discovering, it's an economic system that we are constantly manipulating. Frequently, the system is manipulated specifically to push one number or another in a politically desirable direction. This makes the reporting of any given number potentially "intrinsically misleading". By contrast "People who want to mislead you" may try to use this number, but even their attempts are undermined by changes in the underlying dynamics.
tootie 12y ago
Exactly. It's an INDICATOR. It's not a terribly useful metric in and of itself, but it signals the state of many other metrics in one neat package. U1-U6 all pretty much move in lockstep with each other.
- ska 12y ago
  I've often thought half the confusion with these could have been avoided if U3 was called the "unemployment indicator".
jedsomers 12y ago
The op-ed misrepresents its own opinion, I think. Their real gripe is in their belief that the average American is clueless about what goes into that ~5% unemployment stat. BLS is transparent enough to make this criticism unwarranted, but the media/press covering unemployment statistics certainly aren't careful to define the stats they use. Whether the 'sleight of hand' is intentional or not is another story (I'm inclined to say it's not, people just need a figure to benchmark to)
jpmattia 12y ago
> The BLS puts out 6 different unemployment statistics for every period. U3 is the "official rate", but you can also look at the other ones, including U4 = U3 + "discouraged workers", U5 = U4 + "marginally attached" workers, U6 = U5 + part time workers who would like to be full time. Though folks might want to see some historical data: Here's a graph of U3 (labeled "official"), U5 and U6. http://www.macrotrends.net/1377/u6-unemployment-rate http://www.macrotrends.net/1377/u6-unemployment-rate
hnnewguy 12y ago
Boy am I glad to see this is the top comment. There's nothing misleading about the 5.6% figure. That's the number, and the details on how it's calculated are freely available. If you don't like it, choose another value, make your own adjustments, whatever. Besides, the absolute values matter very little; the trend is what counts. I found this funny: "None of them will tell you this:" Really? I don't think there's a discussion about unemployment on the internet that doesn't mention the fact that certain people are excluded from the calculation of headline unemployment.
- brandonmenc 12y ago
  Those using U3 to promote a positive narrative all know that the general public mistakenly believes "5% unemployment" = "95% of people who want to work full time are working full time." That's what's misleading.
  - djur 12y ago
    Under U3, 5% unemployment is considered more or less normal. Sometimes economic booms dip below that (at which point you usually get contractionary policies to prevent inflation). But 5% will be reported as good news. If U6 was the headline number, "normal" would be 8-9%, and that would be reported as good news. I see no reason to believe that the absolute difference between those numbers would have any effect on politics or policy.
abandonliberty 12y ago
This keeps popping up because many average people have their own understanding of unemployment and it's not the official one. I'm going to go out on a pedantic limb and say that defining U3 as the "official rate" of unemployment is misleading. There is no such thing as a singular unemployment rate, and we could be more transparent when we talk about it. Being clear that we are referring to the U3 indicator of unemployment could help raise the question of nuance for average people. Faulting people for their illiteracy doesn't help move us forward. If we find a way to make them literate, this goes away.
xivzgrev 12y ago
I don't think it's baseless. The "sleight of hand" he asserts is the conscious or unconscious choice to draw conclusions from just the u3 numbers, and I agree with him. He's arguing that if we look at a single metric, as is useful for mass media reporting, it should be the more inclusive definitions to help keep our society accountable.
natmaster 12y ago
The problem is the media, White House, etc all don't use those metrics for the current numbers, and then compare them to previous numbers that do include these other categories. Apples and oranges.
apeace 12y ago
Clifton does not argue that the measurement is not available. I think he is arguing that U3 is not the most useful figure for Americans to hear the most about, from supposedly trustworthy sources. > Here's something that many Americans -- including some of the smartest and most educated among us -- don't know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading. U3 is not referred to as the "headline rate", it's called "official unemployment". While it's unfortunate that most Americans would not inform their voting--or other decisions--by researching the alternate measurements of unemployment, it is indeed the reality. One would like to assume that when the president or a news organization cite an "official unemployment rate", they are offering us the best information about what might concern the average citizen. The number of people who have totally given up on finding a job is definitely one such piece of information. This, I think, is Clifton's main point. Anecdotally, I've been pleasantly surprised at the amount of coverage alternate measurements get in the media. I've seen several segments that highlight this. It seems to me that the meaning of the "official" definition is becoming more commonly known. I think Clifton would disagree with me here. Although, you might try explaining about U6 to a group of people who don't know about it. In several instances, I've been labeled a conspiracy theorist for doing so! Luckily, as you point out, the government does actually provide this information. I'm glad some are spreading the word!
- djur 12y ago
  The absolute value of unemployment isn't particularly important. It's never going to be 0%, so you end up having to establish some n where n% is "full employment". In the US that's around 5% for U3. We were around 5% before the financial crisis and are approaching it again now. That's a meaningful change. U6 is only politically relevant versus U3 if the two have diverged over time. As you might expect, the two increase and decrease in near lockstep [1]. The U6-U3 gap widened during the Great Recession but is narrowing now. It's about a point higher than it was the last time U3 was at current levels. This is significant, but it doesn't make the trend or relative value of the U3 rate less meaningful. [1]: http://goo.gl/iEBEq0 http://goo.gl/iEBEq0
pikachu_is_cool 12y ago
Wouldn't U3 be the only most likely to stay the same, though? You could basically consider that rate as the "recently fired/quit" rate. I'd think a "people who have given up on work entirely" rate would be much better.
vog 12y ago
This is really great, and something you should be proud of. Here in Germany, there's just one unemployment number, and its measurement is adjusted some time to time. So in theory, you could have a raising unemployment rate but decreasing official numbers, just by adjusting the definition from year to year. And in practice, nobody doubts that our government does exactly that. It's really sad.
- ptaipale 12y ago
  Well, I doubt they'd do that. Having worked with Germans, I find it difficult to believe that these numbers would be very easily conned by changing how statistics is done. I am also quite sure that there are various different unemployment numbers calculated by German statistics officials, but the media may wish to stick something simple, which is probably the one that is also comparable across OECD countries.
spacecowboy_lon 12y ago
All satistical mesures are adjusted to suit the UK's ONS is going through this with a replacement for RPI/CPI infaltion mesures. The first new mesure CPIH did not come up with the figures the govenment liked so the ONS wher told to go away and try again. Thsi is first hand info from an insider. Unemployment is also subject to fiddling one previous UK govenment put presure on Doctors to sign people onto disablity - to reduce the headline rate.
moron4hire 12y ago
The problem is that U3 is the only thing that is talked about by politicians and the media.
colemorrison 12y ago
Of course the varying measures are out there, but the most powerful ones are the ones which get press time (and generally only the most favorable looking ones do)

by me2i81 12y ago

MayanAstronaut 12y ago

Very true, every stat has issues. Take payroll of population that this CEO thinks is a better metric. It totally ignores demographics of a aging population. Baby-boomers are retiring, how a metric based CEO ignores this shows were the real bias is.

shubb 12y ago
Uh, this metric is nuts, because it views anything that isn't 9-5 on a payroll as 'not a real job'. That ignores everything from independent contractors to seasonal work. These are huge components of the economy and always have been. So what does a movement in the metric even mean? Does it mean that people are working less, or does it mean that more people are self employed? Or students longer? I think wages are a more insightful way of estimating labor supply and demand. It's not great news: "U.S. real (inflation adjusted) median household income was $51,939 in 2013 versus $51,759 in 2012, statistically unchanged. The 2011 level was $51,842 and the 2010 level was $52,646. In 2013, real median household income was 8.0% lower than the 2007 pre-recession level of $56,436.[1]" (wikipediarite)

saosebastiao 12y ago

But if that U3 metric doesn't describe what normal people feel (the sort of people that don't know the difference between U3 and U6), then there is an argument for calling its "official" designation a sleight of hand. The U6 metric counts underemployment as unemployment. This reflects the common sentiment in the media, and it obviously shows a lack of recovery where other metrics have fully recovered by now.

sanderjd 12y ago
I would be very interested in knowing the history / politics / whatever of how U3 became the "official" measure, what that really means, and what the arguments are for and against its continued use. For instance, most people (the vast majority, anecdotally) don't have any idea that there are multiple measures, and what the one they always hear about does and doesn't include. I've never heard the terms U3, etc. used on the television news or seen them on the front page of the NYT. Why is that? I doubt it's some conspiracy, but I'm genuinely curious how we got here, why we're still here, and whether we should instead be somewhere else.
- med00d 12y ago
  I'm not sure how or why that became the standard, but it's the standard per the International Labour Organization. The U6 rate only started being recorded in 1994.
  - me2i81 12y ago
    U3 data goes back to 1890. There's always someone, usually in an opposing political camp, who says "it's misleading" when it goes down, or when it goes up. Both the left and the right have done this sort of handwaving over the years, but having a stable statistic that goes back many decades is useful even if you want to look at others for a more complete picture about what's going on. On some planet having U6 go from above 17% to just over 11% from 2009 to the present counts as "failed recovery" but I'm not quite sure how. You could argue that there's a bit of a gap there, like around 1.5% if you look at recent history, and maybe even argue that it's structural, i.e. that information technology is causing full-time work to go away, etc. but that's a technical argument to have, which would require looking at a lot of data and not just trying to score points by cherry-picking.
    - med00d 12y ago
      >On some planet having U6 go from above 17% to just over 11% from 2009 to the present counts as "failed recovery" but I'm not quite sure how. Agreed. I argue this point all the time, actually. I think it's interesting to go back through and look at how unemployment fairs in comparison to the political party of the president during that time. Looking at the U3 rate for the past 50 years, unemployment has only gone down once under a republican president (Reagan) and Carter is the only democrat in the past 50 years who didn't see unemployment drop from the time he took office to the time that he left office.

deleted 12y ago

[deleted]

forgottenpass 12y ago

Ha, I came here to make the same comment. Anyone who writes about the misleading nature of U3 without describing U6 exists, is a BLS reported figure, and that there is no prefect definition of "unemployed" is a hack. There is plenty of bad reporting out there (including "analysis" from political talking heads that don't know the difference between U3 and U6), but U3 is like the snow forcasts for NY last week. If you don't care to look beyond the surface level, don't be surprised when a wide-breadth news establishment only gives the basics. If anyone reading wants to see U6, or just doesn't know about raw data on FRED, go look at it [1]. [1] https://research.stlouisfed.org/fred2/graph/?chart_type=line&recession_bars=on&log_scales=&bgcolor=%23e1e9f0&graph_bgcolor=%23ffffff&fo=verdana&ts=12&tts=12&txtcolor=%23444444&show_legend=yes&show_axis_titles=yes&drp=0&cosd=1948-01-01%2C1948-01-01&coed=2014-12-01%2C2014-12-01&width=670&height=445&stacking=&range=&mode=fred&id=UNRATE%2CU6RATE&transformation=lin&nd=&ost=-99999&oet=99999&scale=left&line_color=%234572a7&line_style=solid&lw=2&mark_type=none&mw=1&mma=0&fml=a&fgst=lin&fgsnd=2007-12-01&fq=Monthly&fam=avg&vintage_date=&revision_date= https://research.stlouisfed.org/fred2/graph/?chart_type=line...

vitd 12y ago
Serious question - looking at the graph, it looks like the disparity between U3 and U6 jumped quite a bit in 2009 and is just starting to get back the historical difference today. Do you think it was valid to be concerned about the disparity increasing by so much in 2009? That part does strike me as a little worrying, though it is coming back in line now, which seems good.
- skolor 12y ago
  The difference looks fairly consistent: Febuary 1995: U6 is 183% of U3. Febuary 2000: U6 is 175% of U3. Febuary 2004: 173% Febuary 2006: 155% Febuary 2007: 182% March 2008: 178% Febuary 2009: 183% March 2010: 172% Febuary 2011: 177% Febuary 2012: 180% March 2013: 184% Febuary 2014: 188% There quite a bit of variance, but it seems to be seems to have been consistently in the 170-185%, with a few outliers.
- grayclhn 12y ago
  Steep changes in the slope can introduce visual distortions when you compare the gap between two series. If you download and plot the difference, I think you'll see less of a change.

nkozyra 12y ago

Yes, it's like people think they've stumbled upon something novel by "exposing" the definition of the U3, which has been in place and largely unchanged for a long time. It would be equally "misleading" to just say 11% of people are unemployed by using the U6. There's nuance to these numbers. This article calls the official unemployment rate "misleading." That's moronic. It's explicitly detailed and if you prefer to use a different metric, do so. The value of the # is not the specific percentage itself, it's the trend. Follow any trend you like, they've all had a similar trajectory the last few years.

Terr_ 12y ago
I think it's the difference between "This is intrinsically misleading" versus "People who want to mislead you may use this when they try".
- niels_olson 12y ago
  > This is intrinsically misleading Exactly. Reporting the same number over time sounds very serious and correct, unless the nature of the market itself is what changed. In which case the reporting may totally miss the real event worth reporting. That said, the conversation here is rich in part because at least people are aware that the underlying market may have changed.
  - Terr_ 12y ago
    > Exactly. Wait... exactly what? I'm confused because the "quote" you're using from my post is (ironically?) deeply misleading.
    - niels_olson 12y ago
      Reporting U3, or any other number, as "the unemployment rate" is intrinsically misleading if the underlying reality has changed. The system under discussion is not a physical system that we are discovering, it's an economic system that we are constantly manipulating. Frequently, the system is manipulated specifically to push one number or another in a politically desirable direction. This makes the reporting of any given number potentially "intrinsically misleading". By contrast "People who want to mislead you" may try to use this number, but even their attempts are undermined by changes in the underlying dynamics.

tootie 12y ago

Exactly. It's an INDICATOR. It's not a terribly useful metric in and of itself, but it signals the state of many other metrics in one neat package. U1-U6 all pretty much move in lockstep with each other.

ska 12y ago
I've often thought half the confusion with these could have been avoided if U3 was called the "unemployment indicator".

jedsomers 12y ago

The op-ed misrepresents its own opinion, I think. Their real gripe is in their belief that the average American is clueless about what goes into that ~5% unemployment stat. BLS is transparent enough to make this criticism unwarranted, but the media/press covering unemployment statistics certainly aren't careful to define the stats they use. Whether the 'sleight of hand' is intentional or not is another story (I'm inclined to say it's not, people just need a figure to benchmark to)

jpmattia 12y ago

> The BLS puts out 6 different unemployment statistics for every period. U3 is the "official rate", but you can also look at the other ones, including U4 = U3 + "discouraged workers", U5 = U4 + "marginally attached" workers, U6 = U5 + part time workers who would like to be full time. Though folks might want to see some historical data: Here's a graph of U3 (labeled "official"), U5 and U6. http://www.macrotrends.net/1377/u6-unemployment-rate http://www.macrotrends.net/1377/u6-unemployment-rate

hnnewguy 12y ago

Boy am I glad to see this is the top comment. There's nothing misleading about the 5.6% figure. That's the number, and the details on how it's calculated are freely available. If you don't like it, choose another value, make your own adjustments, whatever. Besides, the absolute values matter very little; the trend is what counts. I found this funny: "None of them will tell you this:" Really? I don't think there's a discussion about unemployment on the internet that doesn't mention the fact that certain people are excluded from the calculation of headline unemployment.

brandonmenc 12y ago
Those using U3 to promote a positive narrative all know that the general public mistakenly believes "5% unemployment" = "95% of people who want to work full time are working full time." That's what's misleading.
- djur 12y ago
  Under U3, 5% unemployment is considered more or less normal. Sometimes economic booms dip below that (at which point you usually get contractionary policies to prevent inflation). But 5% will be reported as good news. If U6 was the headline number, "normal" would be 8-9%, and that would be reported as good news. I see no reason to believe that the absolute difference between those numbers would have any effect on politics or policy.

abandonliberty 12y ago

This keeps popping up because many average people have their own understanding of unemployment and it's not the official one. I'm going to go out on a pedantic limb and say that defining U3 as the "official rate" of unemployment is misleading. There is no such thing as a singular unemployment rate, and we could be more transparent when we talk about it. Being clear that we are referring to the U3 indicator of unemployment could help raise the question of nuance for average people. Faulting people for their illiteracy doesn't help move us forward. If we find a way to make them literate, this goes away.

xivzgrev 12y ago

I don't think it's baseless. The "sleight of hand" he asserts is the conscious or unconscious choice to draw conclusions from just the u3 numbers, and I agree with him. He's arguing that if we look at a single metric, as is useful for mass media reporting, it should be the more inclusive definitions to help keep our society accountable.

natmaster 12y ago

The problem is the media, White House, etc all don't use those metrics for the current numbers, and then compare them to previous numbers that do include these other categories. Apples and oranges.

apeace 12y ago

Clifton does not argue that the measurement is not available. I think he is arguing that U3 is not the most useful figure for Americans to hear the most about, from supposedly trustworthy sources. > Here's something that many Americans -- including some of the smartest and most educated among us -- don't know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading. U3 is not referred to as the "headline rate", it's called "official unemployment". While it's unfortunate that most Americans would not inform their voting--or other decisions--by researching the alternate measurements of unemployment, it is indeed the reality. One would like to assume that when the president or a news organization cite an "official unemployment rate", they are offering us the best information about what might concern the average citizen. The number of people who have totally given up on finding a job is definitely one such piece of information. This, I think, is Clifton's main point. Anecdotally, I've been pleasantly surprised at the amount of coverage alternate measurements get in the media. I've seen several segments that highlight this. It seems to me that the meaning of the "official" definition is becoming more commonly known. I think Clifton would disagree with me here. Although, you might try explaining about U6 to a group of people who don't know about it. In several instances, I've been labeled a conspiracy theorist for doing so! Luckily, as you point out, the government does actually provide this information. I'm glad some are spreading the word!

djur 12y ago
The absolute value of unemployment isn't particularly important. It's never going to be 0%, so you end up having to establish some n where n% is "full employment". In the US that's around 5% for U3. We were around 5% before the financial crisis and are approaching it again now. That's a meaningful change. U6 is only politically relevant versus U3 if the two have diverged over time. As you might expect, the two increase and decrease in near lockstep [1]. The U6-U3 gap widened during the Great Recession but is narrowing now. It's about a point higher than it was the last time U3 was at current levels. This is significant, but it doesn't make the trend or relative value of the U3 rate less meaningful. [1]: http://goo.gl/iEBEq0 http://goo.gl/iEBEq0

pikachu_is_cool 12y ago

Wouldn't U3 be the only most likely to stay the same, though? You could basically consider that rate as the "recently fired/quit" rate. I'd think a "people who have given up on work entirely" rate would be much better.

vog 12y ago

This is really great, and something you should be proud of. Here in Germany, there's just one unemployment number, and its measurement is adjusted some time to time. So in theory, you could have a raising unemployment rate but decreasing official numbers, just by adjusting the definition from year to year. And in practice, nobody doubts that our government does exactly that. It's really sad.

ptaipale 12y ago
Well, I doubt they'd do that. Having worked with Germans, I find it difficult to believe that these numbers would be very easily conned by changing how statistics is done. I am also quite sure that there are various different unemployment numbers calculated by German statistics officials, but the media may wish to stick something simple, which is probably the one that is also comparable across OECD countries.

spacecowboy_lon 12y ago

All satistical mesures are adjusted to suit the UK's ONS is going through this with a replacement for RPI/CPI infaltion mesures. The first new mesure CPIH did not come up with the figures the govenment liked so the ONS wher told to go away and try again. Thsi is first hand info from an insider. Unemployment is also subject to fiddling one previous UK govenment put presure on Doctors to sign people onto disablity - to reduce the headline rate.

moron4hire 12y ago

The problem is that U3 is the only thing that is talked about by politicians and the media.

colemorrison 12y ago

Of course the varying measures are out there, but the most powerful ones are the ones which get press time (and generally only the most favorable looking ones do)