More on Unemployment Rates
Over the past few days, we've been discussing job creation and the various ways to think about unemployment. This has been a long standing theme around here (Augmented unemployment rate, as well as the NILF issue -- Not In Labor Force).
See the list at bottom of BLS Alternative Measures of Labor Underutilization.
Since a picture is worth a 1,000 words, I'd like to point to some recent work by Prof Andrew A. Samwick of Dartmouth. Over at Vox, Baby, the good professor posted a terrific chart showing these different measures of unemployment:
Source: Andrew Samwick
I see two significant factors about these collectively measures of Unemployment:
First, the official (U3) measure, so favored by politicians, understates "real world" unemployment by about a third.
Second, and perhaps most important, since late 2006/early 2007, unemployment levels have bottomed and are now trending higher. And, we appear to be in the early parts of that cycle . . .
What the Unemployment Rate Misses
Andrew A. Samwick
Vox, Baby March 05, 2008
Table A-12: Alternative measures of labor underutilization
BLS Alternative Measures of
U1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
U2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
U3 Total unemployed, as a percent of the civilian labor force (the official unemployment rate)
U4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
U5 Total unemployed, plus discouraged workers, plus all other marginally attached workers as a percent of the civilian labor force plus all marginally attached workers
U6 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 (the "real world" unemployment rate)
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What I find significant is that the measures all seem to track each other, trend-wise.
Posted by: Simstim | Mar 7, 2008 6:07:26 AM
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