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Measuring Unemployment

June 16, 2014 in Economics

By David Howden

The employment picture in America today is as bleak as it was  at the worst of the dot-com recession. In my recent Mises Canada daily I explain why the common unemployment measures that are paraded around give a false depiction of the true employment picture. I also argue that using the steady-state unemployment rate (SSUR) more ably deals with the tricky issues of part-time workers and discouraged job seekers:

Today the SSUR is hovering around 8%. It’s not such as a rosy picture as the U3 paints, but it’s quite a bit better than the U6. Notably this SSUR is the worst that America has faced in the past 14 years. The dot-com bust that led to a recession in 2001 found its bottom with an unemployment rate a hair over 8%, just like today. There has been a slow economic recovery, but the average Joe or Jill still has only as great a chance at getting a job than at the bottom of the second-worst recession of the past 30 years.

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