True unemployment nearly double traditional measure

Posted on December 24th, 2020

A closely followed economic statistic by economists and market analysts is the unemployment rate. In fact, the Department of Labor has numerous levels of unemployment rates that it compiles and reports. Of the various rates, the U-3 is known as the traditional or official rate, which came in at 6.9% for its most recent release. The U-3 rate is considered incomplete and inaccurate by many economists and analysts, since it only accounts for people actively seeking employment. Another available level of the unemployment rate is the U-6 rate, which is considered the true rate for unemployment. In addition to those people seeking employment, the U-6 rate also includes part time workers, underemployed workers, and discouraged workers. The U-6 rate is considered a more accurate assessment of the labor market and a true measure of unemployment. The most recent release for the U-6 rate is 12.1%, nearly double of the traditional U-3 rate.

Source: Bureau of Labor Statistics