Lots of chatter the last couple of days about the unemployment rate reported by the government this past Friday. They announced it was 7.8% and every Republican (and quite a few Independents) said Obama had cooked the books and "No Way Osama" was the rate that low. Republicans say that "real" unemployment is really more like 15%.
So how come the big difference of opinion. Two words..."U-3" and "U-6". I know, I know, I know. Those aren't words. But they are two different ways for reporting unemployment. The "U-3" is used by the government and the media to report the unemployment rate. The "U-6" is considered by economists to be a broader measure of the unemployment situation because it includes to "very important" groups of people that the "U-3" does not:
1. People 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. This group also includes people who are discouraged and have completely given up on finding a job.
2. People who are looking for full-time work but have to settle on a part-time job.
DAH !! Two pretty important groups of people, don't you think?
And here's the real zinger. Guess what the unemployment rate would be today if the feds hadn't changed the rules thirteen million times in the last thirty years and still used "U-6" like they did back then...
Inspired by "Mort Zuckerman"
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