Re:The Big Lie: 5.6% Unemployment
by djur on Wednesday February 04, 2015 @03:27AM
(#8995864)
The absolute value of unemployment isn't particularly important. It's never going to be 0%, so you end up having to establish some n where n% is "full employment". In the US that's around 5% for U3. We were around 5% before the financial crisis and are approaching it again now. That's a meaningful change.
U6 is only politically relevant versus U3 if the two have diverged over time. As you might expect, the two increase and decrease in near lockstep [1]. The U6-U3 gap widened during the Great Recession but is narrowing now. It's about a point higher than it was the last time U3 was at current levels. This is significant, but it doesn't make the trend or relative value of the U3 rate less meaningful.
U6 is only politically relevant versus U3 if the two have diverged over time. As you might expect, the two increase and decrease in near lockstep [1]. The U6-U3 gap widened during the Great Recession but is narrowing now. It's about a point higher than it was the last time U3 was at current levels. This is significant, but it doesn't make the trend or relative value of the U3 rate less meaningful.
[1]: http://goo.gl/iEBEq0