TAMPA, Fla. — As economists and government leaders look for a full recovery from the pandemic-caused economic downturn, unemployment has taken center stage as everyone looks for data to back up their claims. But unemployment and the economy aren't as simple as one number each month.
Officially, the U.S. Bureau of Labor Statistics, which handles measuring employment, reports six different measures each month to assess the unemployment situation. The official unemployment number, typically reported in either seasonally or non-seasonally adjusted, is the U-3 number, which is defined as “total employed, as a percent of the civilian labor force.”
Florida Headed to Pre-Pandemic Unemployment Levels
According to the BLS, the U-3 unemployment rate in Florida in April 2020 was 14.0%, compared to 4.8% in April 2021. Last month’s number shows an economy roaring back to life in the short term. Comparing it to the April 2019 U-3 unemployment rate of 3.3%, the Florida economy is still just short of a full recovery from the pandemic unemployment crisis. However, it is still showing significant strength in closing that gap in one year.
Overall, states across the nation reported higher than normal unemployment levels because of the pandemic last month. Still, according to the New York Times, the new state claims of unemployment are “less than half the level recorded as recently as early February.”
To compare Florida’s job picture to the pre-pandemic levels (February 2020), the state currently has 137,558 more unemployed residents as of April 2021 than pre-pandemic. Still, the overall labor force in the state also shrank by 218,895 residents from February 2020 to April 2021 but is at its highest point since November 2020.
Confused yet? Wait, there’s more.
U-6 Unemployment
For some, a more accurate measure of how the economy is performing resides in the U-6 measure. The BLS says this number is calculated as “total unemployed, plus all marginally attached workers, plus total employed part-time for economic reasons, as a percent of the civil labor force plus all marginally attached workers.”
To understand that definition, it’s important to define what those terms mean.
- Discouraged Workers - the BLS says discouraged workers are defined as people not in the labor force, want and are available for work, and had looked for a job sometime in the prior 12 months. These workers are not counted as unemployed because they hadn’t searched for work in the previous four weeks because they thought no jobs were available.
- Marginally Attached Workers – BLS defines this group as including discouraged workers, with the exception that any reason could have been cited for the lack of job search in the prior four weeks.
- Employed Part-Time for Economic Reasons – this group is defined by BLS as working less than 35 hours per week, but who want to work full-time, are available to do so and gave an economic reason (their hours were cut back or unable to find a full-time job) for working part-time. The group is also referred to as involuntary part-time workers.
To show how the different measurements can produce vastly different rates, the BLS reported all six rates as averaged out from the second quarter of 2020 through the first quarter of 2021. For Florida, the U-3, or official unemployment rate, averaged 8.5% over that time, according to BLS records. Moving to the U-6 rate, Florida averaged an unemployment rate of 15.1% over the exact time period.
What does all this mean to me?
Measuring unemployment is an inexact science yielding statistics that are often spun by anyone seeking to make specific claims to back up their points of view. Remember, it’s but one data point, albeit very important, in the overall economic picture. Much like the Dow Jones Industrial Average doesn’t measure the overall economy, neither does the widely reported unemployment rate. To get the full economic picture, one will have to weigh not only the unemployment rate but also inflation, GDP, total employment, wage growth and many other pieces of data.
