The unemployment rate that is released by the BLS (Bureau of Labor Statistics), propped by media and socialist politicians is the narrowly focused 30 Day ~ U3 rate, which stands at 9.8 percent for December 2010. The U3 rate is the best sounding scenario when it comes to reporting unemployment to America because it doesn’t include workers (over 30 days who cannot find work) and the underemployed (those that are working part-time, but cannot find full-time work anymore). Note that part-time workers counted as employed by U-3, could be working as little as an hour a week to help bolster the U3 for the media.
When workers can no longer find employment and or have become underemployed outside the 30 day period, you end up with the 4 Month ~ U6 rate, or the “REAL” unemployment rate. For December, that rate increased from 16.7 to 17.1 percent.
REAL UNEMPLOYMENT RATE = U6
THE OBAMA REWRITTEN OFFICIAL 30 DAY SWINGING DOOR UNEMPLOYMENT RATE = U3
ROSE FROM BUSH’S APPROX 5% IN 2006 TO OBAMA’S APPROX 10% IN 2010
|The Bureau of Labor Statistics measures employment and unemployment (of those over 16 years of age) using two different labor force surveys conducted by the United States Census Bureau (within the United States Department of Commerce) and/or the Bureau of Labor Statistics (within the United States Department of Labor) that gather employment statistics monthly. The Current Population Survey(CPS), or “Household Survey”, conducts a survey based on a sample of 60,000 households. This Survey measures the unemployment rate based on the ILO definition. The data are also used to calculate 5 alternate measures of unemployment as a percentage of the labor force based on different definitions noted as U1 through U6:
Below is the overview of these six measures.
This is the proportion of the civilian labor force that has been unemployed for 15 weeks or longer. This unemployment rate measures workers who are chronically unemployed. During business-cycle expansions, this rate captures structural unemployment. However, during lengthy business-cycle contractions, this rate is also likely to include a significant amount of cyclical unemployment. U1 tends to be relatively small, in the range of 1-2 percent.
This is the proportion of the civilian labor force that is classified as job losers (workers who have been involuntarily fired or laid off from their jobs) and people who have completed temporary jobs. During business-cycle expansions, this rate is likely to capture some degree of frictional unemployment. However, during business-cycle contractions, this rate is most likely to consist of cyclical unemployment. U2 is larger than U1, but still remains substantially less than the official unemployment rate (U3).
This is the official unemployment rate, which is the proportion of the civilian labor force that is unemployed but actively seeking employment.
This is the official unemployment rate that is adjusted for discouraged workers. In other words, discouraged workers are treated just like other workers who are officially classified as unemployed, being included in both the ranks of the unemployed and the labor force. It is technically specified as the proportion of the civilian labor force (plus discouraged workers) that is either unemployed but actively seeking employment or discouraged workers. The addition of discouraged workers generally adds a few tenths of a percentage point to the official unemployment rate.
This augments U4 by including marginally-attached workers to the unemployment rate calculation. Marginally attached workers are potential workers who have given up seeking employment for various reasons. One of these reasons is that the workers believe such effort would be futile, which places them in the discouraged worker category. Those who have other reasons for not seeking employment are placed in the broader marginally-attached workers category. The addition of marginally-attached workers adds a few more tenths of a percentage point to the official unemployment rate.
This augments U5 by including part-time workers to the unemployment rate calculation. The addition of part-time workers adds a full 2-3 percentage points to the official unemployment rate. This measure of unemployment is perhaps the most comprehensive measure of labor resource unemployment available.
Who is counted as unemployed?
Who is not in the labor force?
|Source : U.S. Bureau of Labor Statistics|