The answer to the question “What is the U.S. unemployment rate?” is another question – which unemployment rate? The U.S. Labor Department reports unemployment several ways.
U-3 Unemployment is the statistic most often quoted by the press. But U-3 only counts as unemployed those people who have applied for a job in the last 4 weeks and have registered their application(s) with a government unemployment office. So what the popular U-3 statistic counts is not people who are unemployed; it counts people who are currently looking for work. There is big a difference. In fact, it doesn’t even reflect all the people who have looked for work in the last 4 weeks, only those who reported their search to the government. Job seekers who are no longer eligible for unemployment compensation and who apply directly to an employer instead of through an employment office are not unemployed as far as the U-3 number is concerned. U-3 is currently 8.2%
U-6 Unemployment counts people who have applied in the last six months and also includes people only working part time on involuntary workfare in order to qualify for government benefits. Obviously U-6 catches more of the truly unemployed. However even U-6 doesn’t include the long term unemployed or anyone not actively seeking work. U-6 is currently in the range of 15%.
In good economic periods the spread between U-3 and U-6 is much lower and therefore less important. U-6 is by far the more realistic number reflecting true unemployment. Reporting U-3 is more favorable to Barack Obama but this is not another case of MSM bias. U-2 has always been the standard reference because it is less volatile.
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