Quote:
Originally Posted by finnbow
The link above describes U3 as the "official unemployment rate." So much for your silly obfuscational argument (as usual).
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Yes, and we can choose to look at the small opening in the clouds in the midst of the downpour an call it a sunny day. But what's the usefulness of that? As your hero
Paul Krugman notes:
There is no “true” unemployment rate, just various indicators of the state of the labor market. Fortunately, these indicators pretty much move in tandem, so we’re not usually confused about whether the market is getting better or worse. But they do measure somewhat different things, and which one you want to look at depends on what questions you’re asking.
However, when you’re looking at food stamps, you want a sense of how many Americans are in economic distress — and a broad measure like U6 comes closer to doing that than the narrow measure usually cited.
The point I'm making, that you and Bob are attempting to dismiss but cannot, is the value of looking at the U6 rate during an economic recovery. Did we really have a robust "Summer of Recovery" that Joe Biden would be proud of?
Krugman is partially correct - amazing that Krugman actually gets something even partially right - that the U3 and U6 rates generally move in tandem, with typically a 3 - 4 point spread. But the two rates diverged significantly in 2009 when the difference jumped to 7 points.
The spread has narrowed of late - still higher than the average spread. However, unemployment remains around 5%, and economic growth is horrid: Q4 2016 came in at 1.9%, and for all of 2016 was a mere 1.6%. As I've posted repeatedly, until the economic growth rate starts to move upward significantly and the U6 number will remain relevant.