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Money and Markets: U-6 Unemployment Rate Is 15.1%

When you hear people in the media and politicians discussing the unemployment rate, the number they quote is called the U-3 rate. This is a very statistically manufactured number, and only counts people who are actively looking for work, but can’t find any. If a person isn’t actively looking for work, yet still unemployed, he or she isn’t counted in this often-quoted unemployment rate.

The better number to look at is the U-6 unemployment rate. It includes, in addition to unemployed people as defined by the U-3 number, people who are underemployed (i.e., not working as much as they want to be), and people “marginally attached to the labor force” — that is, those who need/want jobs, but are so discouraged that they have quit looking.

The U-6 is a much-better indicator of “true” unemployment in the U.S. — and while it has been improving recently, it still stands at a much-higher 15.1%.

Please read more here.