How to Analyze Today’s Unemployment Report

The NCPA summarized Diana Furchtgott-Roth’s post, “What to Look For In Friday’s Unemployment Report,” from earlier this week — here is the first part of it:

The Bureau of Labor Statistics will release its August employment report this morning, and all eyes will be on the unemployment rate. But there are a few other pieces of important data that should be looked at, explains Diana Furchtgott-Roth, Director of Economics21 at the Manhattan Institute.

What should the public pay attention to in the BLS report? Furchtgott-Roth points to seven different measures, including:

  • The labor force participation rate: A decline in the unemployment rate can take place when Americans leave the labor force, as those who have given up on work are not included in unemployment numbers. Similarly, the unemployment rate can rise if more Americans resume their job searches. One must look at the participation rate in order to understand what a drop in the unemployment rate really indicates.
  • The U-6 unemployment rate: There are six different measures of unemployment, the most common being the U-3 rate. The U-3 rate does not count discouraged workers or part-timers who wish to be full-time as unemployed, but the U-6 rate does. In July, the U-6 rate was 12.2 percent, far above the official unemployment rate of 6.2 percent.
  • Revised jobs numbers from previous months: The BLS will revise its previous job creation numbers for June and July when it issues its report. Notably, the jobs numbers issued for August will also be revised in subsequent months.

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