Whenever the news talks about the unemployment rate, many people do not realize that there are different unemployment numbers. There is the number that is released to the public and one that is not. The unemployment rate released to the public is the “official” unemployment rate. The number that is held back is the “real” unemployment rate. The real unemployment rate is used by many economists as a more realistic gauge of the employment picture. So, what is the difference between the official and real unemployment rate?
The Official Unemployment Rate is called the U3 rate. This number is the total unemployed, as a percent of the civilian labor force but does not include other employment situations such as part-time and discouraged workers.
The Real Unemployment Rate is called the U6 rate. This number consists of the following individuals:
The Official Unemployment Rate is called the U3 rate. This number is the total unemployed, as a percent of the civilian labor force but does not include other employment situations such as part-time and discouraged workers.
The Real Unemployment Rate is called the U6 rate. This number consists of the following individuals:
- The total U3 unemployed.
- Those workers who are part-time purely for economic reasons.
- All marginally attached workers which are individuals who are not actively looking for work, but who have indicated that they want a job and have looked for work (without success) sometime in the past 12 months.
- Those workers who are underemployed.
The Current Official Unemployment Rate is 5.0%
The Current Real Unemployment Rate is 9.7%.
Sources: CNBC: What is the Real Unemployment Rate?, Macrotrends: U6 Unemployment Rate, Bureau of Labor Statistic: Marginally Attached Workers.
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