On Friday, my colleague Al and I were having a discussion on the US economy. And he was complaining that it was bad. Very bad. Al is a staunch Republican and in his opinion, the Democrats always mess up the economy and the current administration was historically the biggest culprit.
As is to be expected, I disagreed. And my reasoning was that on all objective parameters the US economy was better than it had been since the previous 8 years when the Republicans held office. I pointed to the unemployment index which was under 5%. Al threw a huge list of attributes, all subjective and I was dismissive, since that was not data. And then Al mentioned that the real unemployment was over 10%. He mentioned the U6 unemployment index and he had my complete attention. And we checked that it was 9.30% as of November 2016.
I was now interested in the unemployment index and U6. And what exactly was the 4.9% that the media talked about. And the answers were fascinating. And like most things, the fastest way to know exactly what each of these is, is to watch a few videos.
What Does 'Unemployment Rate' Mean?
What is the 'real' unemployment rate?
Word of the Day: Unemployment (U3 and U6)
And you can view an interactive an interesting unemployment chart at Macro Trends.
"This interactive chart compares three different measures of unemployment. U3 is the official unemployment rate. U5 includes discouraged workers and all other marginally attached workers. U6 adds on those workers who are part-time purely for economic reasons.
http://www.macrotrends.net/1377/u6-unemployment-rate
And finally for those who like definitions, here are the definitions for U1 through U6.
As is to be expected, I disagreed. And my reasoning was that on all objective parameters the US economy was better than it had been since the previous 8 years when the Republicans held office. I pointed to the unemployment index which was under 5%. Al threw a huge list of attributes, all subjective and I was dismissive, since that was not data. And then Al mentioned that the real unemployment was over 10%. He mentioned the U6 unemployment index and he had my complete attention. And we checked that it was 9.30% as of November 2016.
I was now interested in the unemployment index and U6. And what exactly was the 4.9% that the media talked about. And the answers were fascinating. And like most things, the fastest way to know exactly what each of these is, is to watch a few videos.
What Does 'Unemployment Rate' Mean?
What is the 'real' unemployment rate?
Word of the Day: Unemployment (U3 and U6)
And you can view an interactive an interesting unemployment chart at Macro Trends.
"This interactive chart compares three different measures of unemployment. U3 is the official unemployment rate. U5 includes discouraged workers and all other marginally attached workers. U6 adds on those workers who are part-time purely for economic reasons.
http://www.macrotrends.net/1377/u6-unemployment-rate
And finally for those who like definitions, here are the definitions for U1 through U6.
- U1 : Percentage of labor force unemployed 15 weeks or longer.
- U2 : Percentage of labor force who lost jobs or completed temporary work.
- U3 : Official unemployment rate per ILO definition.
- U4 : U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
- U5 : U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
- U6 : U5 + Part time workers who want to work full time, but cannot due to economic reasons.
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