Measuring unemployment: varying criteria generates half a dozen rates.

• Author: Ainsworth, Joel
• Position: Alaska Trends

Since 1994, the U.S. Department of Labor, Bureau of Labor Statistics has released one official rate along with five alternative rates to measure the underutilization of labor in the United States. BLS releases the data in a range of U-1 through U-6 using various criteria to gauge unemployed or marginally employed workers in the civilian work force. Each rate estimates unemployment using slightly different data, which can offer distinctive perspectives on the state of the civilian labor force.

The official unemployment rate is category U-3, which measures the total number of persons unemployed as a part of the civilian work force. The employment concept in the U-3 data includes all jobless persons who are available to take a job and have actively sought work in the past four weeks. If a person is no longer included as part of the official unemployment rate due to length of unemployment or part-time work, they may still be included in one of the other unemployment categories.

An alternative measurement that has become popular in the news lately is the U-6 measurement, which has been equivocally described as the "real" rate of unemployment. The unemployment rate in U-6 data indeed tends to be much higher relative to the official U-3...