U.S. unemployment was 8.1% in August, according to the U.S. Bureau of Labor Statistics (BLS). Meaning, of all the people who want to work or are actively looking for a job, 8.1% don’t have one. This number gets an awful lot of media attention, particularly in an election year, but it is deeply misleading. For example, in August, relatively few jobs were added but more workers dropped out of the workforce, so the unemployment rate went down.
Most leaders and citizens probably don’t know what the unemployment number represents. I suspect most don’t even know that it’s actually a survey of 60,000 households conducted each month by the Current Population Survey on behalf of the BLS. Some think it is an actual tally of paperwork from claims. It is not — it’s an estimate drawn from monthly tracking surveys.
The problem with the unemployment metric is that an additional 6.6% report being “underemployed,” meaning they are left out of the 8.1% unemployed because they have part-time work but wish they were employed full time; they’re not classified as “unemployed.” They’re not in the 8.1% everyone’s watching, and this makes things complicated. Nearly 15% underemployed, including the unemployed, is much more accurate and significant than the single 8.1%.
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