Monday, February 15, 2016

U6 Is Now the Last Refuge of Scoundrels

Kevin Drum on Trumps claims about the unemployment rate: U6 Is Now the Last Refuge of Scoundrels . "On Tuesday Donald Trump repeated his fatuous nonsense about the real unemployment rate being 42 percent."

Trump is obviously just making shit up, but the 10 percent number is colorably legitimate. It's officially called U6, a measure of unemployment plus folks who have been forced to work part time plus workers who are 'marginally attached' to the labor force. Right now it stands at 9.9 percent.

But you can't just toss this out as a slippery way of making the economy seem like it's in horrible shape. If you're going to tout U6, you have to compare it to what's normal for U6. And what's normal in an expanding economy is about 8.9 percent. This means that even big, bad U6 is within a hair of its full-employment value."

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