Here's the story:
This is going alongside a reported unemployment rate that has not changed significantly in 41 months.
I don't see how anyone could consider people who run out of unemployment benefits as no longer unemployed.
U3 has become the 'nanny' figure.
They do the same with inflation, the real inflation rate is much higher than the official rate.
And since GDP is adjusted for inflation, the real GDP is lower.
Unfortunately, the unemployment rate has had a very narrow definition in the field of economics for decades - maybe since the beginning. I'm not sure why that is so, but it is.
Nope, it started in the early 1990's. I was in logging country in Washington state and in this one country it was 23% unemployment. The rules are if 1 country in a state is over 10% then the entire state get the federal extended benefits. At the time there were 2 states that qualified.
Then they redefined unemployment and made up a word that even though you are still looking for work if run out of benefits - considered 'discouraged worker' even if go to the unemployment and register looking for work.
By a stroke of a pen the unemployment rate went for 23% to 9%, and the state lost federal extension benefits.
the early 1990's is also when they taxed UI benefits as income. funny - isn't that taxing a tax?
Do you mean "county"?
Hmmm. Since I didn't specify what the "narrow definition" was or claim that it had remained consistent throughout the decades, I'm not sure how you feel you are contradicting me. I'm guessing that you thought I meant there had been one and only one narrow definition through the decades, but that is not what I said, nor is it what I meant. I concede that the way I stated it could be misinterpreted in that way.
I'll rephrase to clarify what I was intending to say: in the field of Economics, the term Unemployment has a narrow, mathematically specific definition which is not identical to the everyday usage of the term; that fact (narrow definition for Economists, vaguer and broader definition for the general public) has been true for decades, even though there may have been changes to the various categories of Unemployment that Economists measure.
I recall very clearly a conversation in the late sixties or early seventies with a friend who now teaches Economics at a noted state university. He explained at that time that the unemployment rate referred to people who were out of work and looking for employment. Out of work people who had stopped looking for employment were not counted.
It is possible that there has been more than one change since that time, and that would make sense to me. The concept of U-3 and U-6 may not be as old as the conversation I mentioned.
I have tried to locate some information on the changes in defining and/or measuring the Unemployment Rate since the 1960s, but I don't have the time to do that research now. When I can contact my friend again, I'll ask for a history of the measurement, but it will be several weeks before that will be possible - sorry.
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