U1 : Percentage of labor force unemployed 15 weeks or longer.
U2 : Percentage of labor force who lost jobs or completed temporary work.
U3 : Official unemployment rate per ILO definition.
U4 : U3 + "discouraged workers", or those who have stopped looking for work
because current economic conditions make them believe that no work is available for them.
U5 : U4 + other "marginally attached workers", or "loosely attached workers",
or those who "would like" and are able to work, but have not looked for work recently.
U6 : U5 + Part time workers who want to work full time, but cannot due to economic reasons.Below is the overview of these six measures.
U1:
This is the proportion of the civilian labor force that has been
unemployed for 15 weeks or longer. This unemployment rate measures
workers who are chronically unemployed. During business-cycle
expansions, this rate captures structural unemployment. However,
during lengthy business-cycle contractions, this rate is also
likely to include a significant amount of cyclical unemployment.
U1 tends to be relatively small, in the range of 1-2 percent.
U2:
This is the proportion of the civilian labor force that is
classified as job losers (workers who have been involuntarily
fired or laid off from their jobs) and people who have completed
temporary jobs. During business-cycle expansions, this rate is
likely to capture some degree of frictional unemployment. However,
during business-cycle contractions, this rate is most likely to
consist of cyclical unemployment. U2 is larger than U1, but still
remains substantially less than the official unemployment rate (U3).
U3:
This is the official unemployment rate, which is the proportion of
the civilian labor force that is unemployed but actively seeking
employment.
U4:
This is the official unemployment rate that is adjusted for
discouraged workers. In other words, discouraged workers are
treated just like other workers who are officially classified as
unemployed, being included in both the ranks of the unemployed and
the labor force. It is technically specified as the proportion of
the civilian labor force (plus discouraged workers) that is either
unemployed but actively seeking employment or discouraged workers.
The addition of discouraged workers generally adds a few tenths of
a percentage point to the official unemployment rate.
U5:
This augments U4 by including marginally-attached workers to the
unemployment rate calculation. Marginally attached workers are
potential workers who have given up seeking employment for various
reasons. One of these reasons is that the workers believe such
effort would be futile, which places them in the discouraged
worker category. Those who have other reasons for not seeking
employment are placed in the broader marginally-attached workers
category. The addition of marginally-attached workers adds a few
more tenths of a percentage point to the official unemployment
rate.
U6:
This augments U5 by including part-time workers to the
unemployment rate calculation. The addition of part-time workers
adds a full 2-3 percentage points to the official unemployment
rate. This measure of unemployment is perhaps the most
comprehensive measure of labor resource unemployment available.
