The real unemployment rate is almost double the widely reported rate issued in each month's jobs report. The Bureau of Labor Statistics (BLS reports on both each month, but there isn't as much media attention paid to the real unemployment rate. However, it may paint a clearer picture of true unemployment in the United States
In the widely reported unemployment rate , the BLS only counts those who have looked for a job in the past four weeks as unemployed. They're included in the labor force, because their jobless situation is only temporary (hopefully).
Among them are the discouraged workers , who have given up looking for work altogether. The rest have gone back to school, gotten pregnant or become disabled. They may or may not eventually return to the labor force, depending on their circumstances.
Once they haven't looked for a job in 12 months, they're no longer counted as marginally attached.
How to calculate current statisiticsIn September 2014, the real unemployment rate was 11.8%, nearly double the widely-reported unemployment rate of 5.9%. Here's how to calculate both.
Step 1. Calculate the official unemployment rate:
9.262 million unemployed workers / 155.862 million in the labor force = 5.9%.
Step 2. Add in marginally attached workers: There were 2.226 million people who were marginally attached to the labor force. Add this to both the number of unemployed and the labor force.
11.488 million / 158.088 million = 7.3%.
Step 3. Add in part-time workers: There were 7.103 million people who were working part-time because they couldn't get full-time work, although they'd prefer it. Add them to the unemployed, they're already in the labor force.
Here is a comparison. The official rate is about half of what the real rate is
- January 1994: the official rate was 6.6% vs the real rate of 11.8%
- 1995: 5.6% vs 10.2%
- 1996: 5.6% vs 9.8%
- 1997: 5.3% vs 9.4%
- 1998: 4.6% vs 8.4%
- 1999: 4.3% vs 7.7%
- 2000: 4.0% vs 7.1% -- when unemployment was the lowest, right before the stock market crash in March.
- 2001: 4.2% vs 7.3%
- 2002: 5.7% vs 9.5%
- 2003: 5.8% vs 10.0%
- 2004: 5.7% vs 9.9%
- 2005: 5.3% vs 9.3%
- 2006: 4.7% vs 8.4%
- 2007: 4.6% vs 8.4%
- 2008: 5.0% vs 9.2%
- 2009: 7.8% vs 14.2%
- 2010: 9.8% vs 16.7% -- when both January unemployment rates were the highest.
- 2011: 9.1% vs 16.2%
- 2012: 8.3% vs 15.1%
- 2013: 7.9% vs 14.4%
- 2014: 6.6% vs 12.7%