The Real Unemployment Rate

Posted by Brian

the real un- and underemployed rate — the so-called “U6″ — is near 20 percent.


Yesterday in The Financial Times, Ed Luce hits on a point that I made when the most recent unemployment figures were released two weeks ago, namely that the unemployment figures that are shared publicly are vastly understating the real unemployment rate:
America is employing a decreasing proportion of its people. At the start of the recession, the employment-to-population rate was 62.7 per cent. The rate is now 58.5 per cent. Last month, unemployment fell from 9 per cent to 8.6 per cent. On the surface, this looked like a welcome leap in job creation. In reality, more than half of the fall was accounted for by a decrease in the numbers “actively seeking” work. The 315,000 who dropped out of the labour market far exceeded the 120,000 new jobs.
Read More at Outside The Beltway 
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