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Thursday, Aug. 12, 2021

Is there more than one type of measure of the unemployment rate?

EconoFact, EconoFact
yes

The official unemployment rate, the one reported in headlines each month, is known as the U3 rate. An alternative measure of unemployment is called the U6 unemployment rate. The differences between the two are their definitions of who is unemployed and who is in the labor force. The U6 rate, unlike the U3 rate, categorizes people as unemployed if they are working part time for economic reasons. The definition of the labor force used in the U3 rate is anyone who was actively looking for a job over the past three months while the U6 rate has a broader definition of anyone who looked for work in the last 12 months. The U6 unemployment rate, which began being published in 1994, is greater than the U3 unemployment rate; in June 2021, the U3 rate was 5.9% and the U6 rate was 9.8%.

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