Here's what the Bureau of Labor Statistics calls 'unemployment."

What the media reports as "the" unemployment rate is not the only measured unemployment rate. It is U-3, the rate of unemployment that, as it drops, leads to inflation. That's the rate the bond market considers important, since if it drops too much they have to raise interest rates to anticipate inflation. It is relatively unimportant to individuals looking for a job. So here is how The Bureau of Labor Statistics measures unemployment.

This is just the definitions. Go look at the BLS article for the numbers. I'm not willing to spend six hours creating a table to present them neatly in blogger.

• U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force


• U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force


• U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)


• U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers.


• U-5 Total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers


• U-6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers

NOTE:

• Marginally attached workers are 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.


• Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job.


• Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

For more information, see "BLS introduces new range of alternative unemployment measures," in the October 1995 issue of the Monthly Labor Review. Updated population controls are introduced annually with the release of January data.

U-3 is subject to a lot of manipulations at BLS. For better statistics, U-6 should be reviewed and observed for changes over time.