The U6 rate is what people refer to as the “real” unemployment rate ... versus what the government advertises which is the U-3 rate.
http://www.bls.gov/news.release/empsit.t15.htm
The U-3 rate has certain characteristics that cause many conservatives to consider it extremely inaccurate. The most glaring being that once you no longer qualify for unemployment insurance, you are no longer considered unemployed in the U-3 rate, even if you are not working. It is this little caveat that has allowed the unemployment rate to dip from near 10% to 8.2%. Do you really think we have had a 1.8% improvement in employment in the last year and a half?
Last month Duncan Hunter proposed we change the official unemployment number to the U-5 number. Article and reasons here. http://www.humanevents.com/2012/07/06/hunter-wants-new-number-as-measure-of-unemployment-rate/
If you really dig into all this, it can make your head explode. The way they actually calculate the unemployment number is based on surveys if you can believe it. http://www.economywatch.com/unemployment/measurement.html
Many here on FR openly wonder why we dont take readily available data ... such as withholding reporting ... and use that for the calculations, because that would show us not only how many have jobs, but allow us to trend information like average pay.
That average pay thing is also quite important in the unemployment numbers because of what are called marginally attached employees. Lets say you have a job, and work gets slow so they cut your hours. In fact, lets say you drop to the point where you no longer qualify for benefits, and you cant make your mortgage payment. The U-3 number says you are still employed. The U-6 number says you are marginally employed. 8.2% unemployed with a huge number marginally employed sucks.
The last thing to keep in mind regarding unemployment is the size of the labor pool. Certain things add to the size of the labor pool ... like immigration and the birth rate. Certain things reduce the labor pool, like retirement and death and disability. The thing that makes no sense to many of us is when lack of jobs is used to reduce the official size of the labor pool. Again, go back to people “dropping off” unemployment. The U-3 rate says they are no longer in the labor pool. This is why when there is an uptick in employment, a month or two later it crashes again. Those “not in the labor pool” get hope, and start looking for jobs again. At present, there are fewer Americans in the labor pool than the day Obama took office, which is another reason the U-3 rate is as low as 8.2%
nice explanation.
btw, you’re an excellent driver.