The current state of the economy may be worse than we think due to the way that we report economic numbers such as the unemployment rate. The rate only tells us how many people who are looking for work have jobs. It doesn't reflect the number of people who are discouraged, and no longer looking for work, or the nature of the jobs that people are taking.
The U6 takes those factors into consideration and reports a higher rate than is officially presented, 11% rather than 6.1%:
The U6 in September rose to 11 percent, its highest level since the data series started in 1994 and significantly higher than it was in the last recession, in 2001. The ratio between the U6 and the official unemployment rate has remained relatively steady over the last several years. But that means that as the unemployment rate has risen, so too has the portion of the population suffering from other types of work deficits. Three years ago, when the unemployment rate was 5.1 percent, an additional 3.9 percent of the labor force fell into one of those other underutilized categories. Last month, with the unemployment rate at 6.1 percent, an additional 4.9 percent of the labor force was underutilized. (See charts comparing the unemployment rate and the U6 rate.) Add it up, and more than 10 percent of American workers are essentially not contributing full-time to their families' well-being and to that of the economy at large. The unemployment rate may still be historically low, but the underutilization is historically high.
