The May 2009, unemployment numbers for the U.S. were released on Friday, and the offical unemployment rate increased to 9.4%. However, the offical unemployment rate does not tell the complete story. The above chart compares the offical unemployment rate, the BLS’ U-6 rate, and what I call the suffering rate. Each one of these measures unemployment differently. Let me explain.
First, the offical unemployment rate should be thought of as a baseline. Then there is the U-6 rate which is the BLS’ broadest offical measure of unemployment. It takes the offical unemployment rate and adds to it. The U-6 rate includes:
1) Those that fall into the offical unemployment rate.
2) Plus all marginally attached workers (BLS defines marginally attached as: persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past).
3) Plus those employed part time for economic reasons.
The U-6 is then measured as a percent of the civilian labor force plus all marginally attached workers. The U-6 is a broad measure of unemployment, but misses some of the people. For example, individuals that want a job but have not looked for work in the recent past (last 12 months) are not included. However, the suffering rate does include these individuals.
The suffering rate includes:
1) Those that fall into the offical unemployment rate.
2) Plus all individuals that the BLS states ”want a job” (even if they have not looked for work in the recent past).
3) Plus those employed part time for economic reasons.
The suffering rate is then measured as a percent of the civilian labor force plus all workers that want a job.
To get a clear picture of the unemployment situation in the U.S. you need to look past the offical unemployment rate of 9.4%. You even need to look past the BLS’ U-6 measure of unemployment that stands at 16.4%. I think the suffering rate of 18.3% is the broadest (and best) measure of U.S. unemployment (under-empolyment).
Data Source:
Bureau of Labor Statistics
Tables A-1, A-7, A-12, and The Employment Situation, May 2009.
All numbers are seasonally adjusted.
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Is there an equivalent suffering rate (or even U-6 figure) for the Great Depression Era or even the early 1980’s? Would be good to get a comparison to see how it rates against those periods. Thanks.
Comment by John Fontana — June 8, 2009 @ 6:19 am
Good question John. I’ll do some research and see how far back I can go. If I find something, I’ll post it.
Comment by admin — June 8, 2009 @ 7:23 am