As of this writing, the official unemployment rate (for February ’12) is 8.3%. It’s pretty popular to talk about the Fed’s dual mandate of simultaneously keeping unemployment and inflation rates low in the mainstream media, but that number does not reflect the actual amount of people in the US who do not have a job.
The way unemployment is calculated is a little misleading, with some unofficial surveys finding rates closer to 22%. In comparison, during the Great Depression, unemployment reached a high of 25%.
So, what I want to do in this post is attempt to show the different ways official unemployment is calculated.
I’m going to take the definitions of each of the 6 calculations (which are pyramid shaped, cumulatively speaking) that the Bureau of Labor Statistics (BLS) uses directly from Wikipedia in an attempt to avoid any controversy. All numbers are seasonally adjusted down. Let’s start at the top:
U1: Percentage of labor force unemployed 15 weeks or longer.
By this definition, you are only considered unemployed if you haven’t had a job for just under 4 months. This is the smallest aggregate of unemployed and is currently at 4.9%.