Unemployment Big Picture

View Unemployment Big Picture   (hover mouse over graphs to view details)

This chart adds the change in the labor force participation rate (left work force) to the unemployment rate (U3) to determine if the change in labor force participation is of sufficient magnitude to distort the unemployment picture. If a person has not actively looked for work in the past 4 weeks, they are dropped from the unemployment count and as a participant in the labor force.  See how the government measures unemployment.

  1. Unemployment Rate (U3) – the number unemployed as a percent of the labor force.  This is the official unemployment rate, and only includes people without jobs that actively looked for work within the past four (4) weeks.
  2. U3% plus those that left the work force) – This broader view of the number of people being impacted by the job market, is calculated as: Total Unemployed (U3) + marginally attached + part time due to economic reasons.  Between 2001 and 2008, the U6 unemployment measure averaged about 14,000,000 people.  It currently stands at 23,000,000.

Normally this does not have much impact on reporting, as evidenced by how closely the two graphs stay together from 2001 to 2008.  However, in a harder job market when larger numbers of people experience long-term unemployment, many eventually stop looking for work, which causes them to no longer be counted in the labor force and no longer counted as unemployed.

These graphs also show that from 2009 through the present, we are experiencing a particularly hard job market with many people no longer included in the unemployment count, as evidenced by the amount of separation between the graphs between 2009 and 2012.  For more information about this, see the other unemployment rate on CNN Money.

If more jobs can be created, then the labor force participation rate increases with more people working.  More people working then increases the gross domestic product, which in turn produces more revenue for the government.

The following data sets are from the U.S. Bureau of Labor Statistics.

  • Unemployment Level – Civilian Labor Force – LNS13000000
  • Alternative measure of labor underutilization U-6 – LNS13327709
  • Civilian Labor Force Level – LNS11000000
  • Civilian Labor Force Participation Rate – LNS11300000
  • Civilian Noninstitutional Population
  • Plus calculations from a January 2002 baseline