The unemployment rate is one of the most widely followed economic indicators in the world. It measures the percentage of people of working age who are unemployed, divided by the total number of employed and active job-seekers. But it is only part of the picture. Many economists believe that it fails to capture the full extent of labor market underutilization. They point to other indicators, including underemployment, that include workers who have settled for jobs below their skill and experience level (such as a mechanical engineer driving a cab), and involuntary part-time workers who want full-time work but are only able to find part-time jobs.
The government collects statistics on employment and unemployment from a variety of sources, but it is the household labor force surveys conducted by the Bureau of Labor Statistics that are used to calculate the official unemployment rate. This monthly survey asks households whether their members are working or looking for jobs. It also asks the industry and occupation of the last job they held, their reason for being jobless (for example, they quit their job or were laid off), how long they have been unemployed, and a wide range of other information about the individuals who are not employed.
The government’s official measure of unemployment is the U-3 measure, which includes those without a job who actively searched for work in the previous four weeks and are available to work. It is complemented by the U-6 measure, which adds discouraged workers (those who have stopped searching for work because they feel it is hopeless) and involuntary part-time workers (who would prefer full-time jobs but can only find part-time ones). These measures are published regularly as part of the BLS Employment Situation Report.