U-6 (Unemployment) Rate

U-6 (Unemployment) Rate

The U-6 rate is a broad measure of labor underutilization published monthly by the U.S. Bureau of Labor Statistics (BLS). It includes not only the unemployed who have actively looked for work recently but also underemployed workers, discouraged jobseekers, and other marginally attached workers. Many economists consider U-6 a more revealing indicator of the true health of the labor market than the commonly reported U-3 rate.

What U-6 includes

• Unemployed people who have looked for work in the past four weeks (the U-3 definition).
• Part-time workers who want and are available for full-time work but are working part time for economic reasons (underemployed).
• Discouraged workers who want a job but have stopped actively looking because they believe no jobs are available.
• Other marginally attached workers who are not currently searching but have looked for work in the past 12 months.

How U-6 is calculated

U-6 = (Unemployed + Marginally attached + Part-time for economic reasons) ÷ (Civilian labor force + Marginally attached) × 100

Key points:
– Marginally attached workers are added to both the numerator and denominator.
– Part-time workers for economic reasons are added to the numerator only (they are already part of the labor force).
– The unemployment measures are derived from the BLS Current Population Survey, a household survey covering roughly 60,000 households (about 110,000 individuals) across the U.S.

U-6 vs. U-3 (official unemployment rate)

• U-3: Percentage of the civilian labor force unemployed and actively seeking work in the past four weeks. This is the widely reported “official” unemployment rate.
• U-6: A broader measure that captures underemployment and discouraged or marginally attached workers that U-3 omits.
• Because it counts additional groups, U-6 is typically higher than U-3 and can better reflect slack in labor markets.

Examples and historical context

• During major shocks, U-6 can rise far above U-3; for example, in the early months of the COVID-19 shutdowns U-6 spiked well above the official rate.
• In routine months, U-6 usually runs several percentage points higher than U-3, reflecting part-time workers wanting full-time work and marginally attached workers.

Why U-6 matters

• It captures hidden weakness in the labor market: people working fewer hours than they want, or who have stopped looking but would work if jobs were available.
• Policymakers, analysts, and some private-sector researchers use U-6 to assess underutilization and to inform labor and economic policy.

Where to find U-6 data

• The BLS publishes monthly alternative measures of labor underutilization (U‑1 through U‑6). Annual state averages include U-6; state-level U-3 is provided monthly.
• Federal Reserve and data repositories (e.g., FRED at the St. Louis Fed) also track historical U-6 series.

The six alternative unemployment measures (summary)

• U-1: Long-term unemployed (15 weeks or longer) as a percent of the labor force.
• U-2: Job losers and people who completed temporary jobs as a percent of the labor force.
• U-3: Unemployed and actively seeking work (official unemployment rate).
• U-4: U-3 plus discouraged workers.
• U-5: U-4 plus other marginally attached workers.
• U-6: U-5 plus persons employed part time for economic reasons.

Key takeaways

• U-6 is the broadest standard measure of labor underutilization and often called the “real” unemployment rate.
• It includes underemployed and marginally attached workers omitted from the official U-3 rate, making it useful for gauging hidden weakness in the job market.
• Use U-6 alongside U-3 and other indicators for a fuller picture of employment conditions.

Sources: U.S. Bureau of Labor Statistics; Federal Reserve Economic Data (FRED); Gallup.