What is the difference between u3 and u6

For example, a stonemason who wants to work but who has become discouraged by a lack of opportunity in the midst of a deep economic recession would not be included in the U-3 unemployment rate. Neither would a marketing executive who is laid off at age 57 and stops scheduling new job interviews due to their experience of age discrimination.

A person who only works one six-hour shift per week because no full-time jobs are available in their area is another example of someone who would not be included in U-3 unemployment. Unlike the U-3 rate, the U-6 unemployment rate includes a whole swath of unemployed people—namely, everyone not listed in the U-3 rate.

That means the U-6 rate is much truer to a natural, non-technical understanding of what it means to be unemployed. This rate accounts for anyone who has been seeking employment within the previous 12 months but have been unable to secure a job and has not searched for work in the past four weeks. It also includes anyone who has gone back to school, become disabled, and people who are underemployed or working part-time hours.

By capturing everyone who exists on the margins of the labor market , the U-6 rate provides a broad picture of the underutilization of labor in the country. In this sense, the U-6 rate may be considered the true unemployment rate. In September , for example, with effects of the pandemic still being felt, the U-3 unemployment rate was 7. Unemployment is divided into six different categories including the U-3 and U-6 rates. The term marginally attached workers includes discouraged workers and refers to those who are available and willing to work, but who have not looked for work in the prior four weeks for any reason.

However, they have looked for work at some point in the previous 12 months. Bureau of Labor Statistics. Accessed Oct. Alternative Measures of Labor Underutilization. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data.

We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Housing Starts. Continued Jobless Claims - Historical Chart. Jobs Lost From Coronavirus. Initial Jobless Claims - Historical Chart. Real Retail Sales.

Debt to GDP Ratio. National Debt by Year. Historical Inflation Rate by Year. BLS is committed to updating the alternative measures data for states on a 4-quarter moving-average basis. The use of 4-quarter averages increases the reliability of the CPS estimates, which are based on relatively small sample sizes at the state level, and eliminates seasonality. Due to the inclusion of lagged quarters, the state alternative measures may not fully reflect the current status of the labor market.

The analysis that follows pertains to the fourth quarter of through the third quarter of Data are also available for prior time periods back to The six state measures are based on the same definitions as those published for the United States:.

Definitions for the economic characteristics underlying the three broader measures of labor underutilization are worth mentioning here. Discouraged workers U-4, U-5, and U-6 measures are persons who are not in the labor force, want and are available for work, and had looked for a job sometime in the prior 12 months. They are not counted as unemployed because they had not searched for work in the prior 4 weeks, for the specific reason that they believed no jobs were available for them.

The marginally attached U-5 and U-6 measures are a group that includes discouraged workers. The criteria for the marginally attached are the same as for discouraged workers, with the exception that any reason could have been cited for the lack of job search in the prior 4 weeks.

As you can see, they move together, but not quite in lockstep. Some of them are more volatile than others. But overall, they seem to move more or less in the same direction. Thanks Second, those of you who are interested in the more wonky aspects of Labor data need to understand the differences between what these various under-utilization metrics are actually measuring.

According to the Bureau of Labor Statistics: BLS, U1-U6 U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force U-3 Total unemployed, as a percent of the civilian labor force official unemployment rate U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force Those definitions are straight from the BLS site.