Sunday, April 06, 2008

Labor market deterioration

I’ve argued on many occasions that the official unemployment rate has been a poor guide to the reality of the labor market in recent years. One alternative is “U6″, which the BLS lists under “alternative measures of labor underutilization.” It’s defined as

Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers

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This measure shows what most people sense: the labor market has gotten a lot worse over the past year, not just in the last few months.

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