Thursday, September 15, 2011

Unemployment & Underutilization of Labor

The Unemployment Rate isn't the only way to measure the state of the economy. John Mathews outlines other ways to define unemployment in his Trendlines Magazine article. Below is an excerpt of the article which you can read in full by clicking here.

The Bureau of Labor Statistics publishes “Alternative Measures of Labor Underutilization.”  These look at labor force participation and labor utilization through increasing stages of discernment. Six ascending measures of labor underutilization emerge, labeled U-1 through U-6.  With each successive step, additional and more liberal criteria are added. These alternative criteria are measured through the Census Bureau’s monthly Current Population Survey (CPS, or commonly called the Household Survey).  Results are compiled and released by BLS.  The closest measure to the official unemployment rate is the U-3 rate, it being “total unemployed as a percent of the civilian labor force.

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