Warren Buffet

I originally posted this on the Daily Gotham earlier in the week.

Mark Twain said there are lies, damn lies and statistics and his adage applies to unemployment measurement. The Bureau of Labor Statistics (BLS) publishes six unemployment metrics monthly, each referred to in ascending order of inclusiveness of the unemployed as U-1, U-2, etc.

The measure reported by the media as the unemployment rate that severely undercounts the unemployed is referred to as U-3. The U-3 rate is obtained by dividing the narrowest definition of the unemployed by the work force.
The U-3 definition does not include whom the BLS calls discouraged and marginal workers, those who want a job but have given up the search because market conditions and personal experience indicate the process is futile.

U-6 Unemployment counts the marginal and discouraged plus those seeking full time employment but can only find part time work. The Federal Reserve tracks what it defines as the Augmented Unemployment rate, which I’ve read is equivalent to U-6 less part time workers. I couldn’t find any Augmented Unemployment releases on the Fed site and despite major data inclusion differences, some bloggers have used U-6 and the Fed’s stat interchangeably.

Naive supply side economics fans and the heartless and often evil advocates of cutting the wealthy’s taxes as a means to kill the beast of New Deal and Great Society programs love to brag that the historically low recent unemployment numbers (April’s seasonally adjusted U-3 was 4.5 percent) are evidence that their tax policy scam truly does trickle down to those who are not tax cut direct material beneficiaries. Despite those wishing to give handouts to Gates and Buffett’s (who personally don’t even want the cuts) spin, the economy just isn’t that robust. The seasonably adjusted April U-6 numbers, which are a much more accurate economic suffering barometer than what the media regularly announces, increased to 8.2 percent.