Economic Charts

All economic charts are at the bottom of the page.

Wednesday, August 4, 2010

Learning about Unemployment

With the unemployment rate data due out Friday at 8:30 am EST, I thought it fitting to discuss what goes into it.  The unemployment rate consists of two components, the size of the labor force and the number of unemployed actively looking for work.  This number is what is reported by BLS (Bureau of Labor Statistics).  To calculate this you take the unemployed number divided by the labor force to get the percentage.  Some argue that this is not an accurate measure of the unemployed cause it does not contain the following:

  • Discouraged workers ( a worker who has given up looking for work, due to no possibilities)
  • Marginally attached workers ( a worker looking for work, but has not looked for work recently)
  • Part time workers who want full time work (self explanatory)
Adding these components into the mix is what is considered U6 unemployment, which I feel is a more accurate picture of unemployment.  I calculated both, with the help of my daughter Brittany ( who is working on a Business Major), which resulted in the graph below.  I will be keeping a graph of both figures at the bottom of  this blog post for your reference going forward.  Here is the graph currently (will be updated friday and appear at the bottom of the blog):
As you can see their is a large difference in the rate of U6 unemployment and what is reported by the BLS. does a calculation of unemployment as well and they have current rate of inflation right around 22% which is approximately 4% above U6.  I don't know what that number is composed of, but is reported to be the most accurate.  

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