The Official Unemployment rate (U3) reflects the percent of the estimated labor force who have looked for a job in the last 6 months.
A better measure of unemployment is U6 which adds back part time employed workers, who want full time jobs and workers that have looked for a job in the last 12 months plus “discouraged” workers (workers who give a job related reason for not working). This number is 6.7%.
This number is really import because it helps to explain where the “reserve” of workers are (since the new young workers joining the labor force offset those who are retiring).
The majority of the 37% of the labor force is not interested in a job… People like me who worked like crazy when they were young and retired early or stay at home moms like my wife while our children were growing up (after our children grew up, she started her own business that is doing well). It has some value since at some price some of this number could be persuaded to re-enter the workforce…
