Friday, April 6, 2012

U.S. Jobs Data: Broad Unemployment Rate Falls Sharply in March

The broad unemployment rate fell sharply to 14.5 percent in March. That is almost three full percentage points below its peak for the business cycle, reached in October 2009. The standard unemployment rate also fell. Its March rate of 8.2 percent was the lowest since January 2009.

The official unemployment rate is the ratio of unemployed persons to the labor force. The broad unemployment rate, which the Bureau of Labor Statistics calls U-6, differs from the standard rate in several ways. In addition to unemployed persons, the numerator of U-6 includes marginally attached persons who would like to work but are not looking because they think there are no jobs. It also includes involuntary part-time workers who would prefer full-time work but cannot find it. The denominator of U-6 is equal to the labor force plus marginally attached workers. Many economists consider U-6 to be a better measure of the number of people who are distressed because of prevailing labor market conditions.

Both the standard and broad unemployment rates are based on a monthly survey of households. Surprisingly for this stage of the business cycle, the March survey showed decreases in the number of unemployed persons, the number of employed, and the labor force as a whole.

The BLS also reports monthly data on payroll jobs, based on a separate survey of employers. The payroll jobs report does not include farm workers or the self-employed. It showed an increase of 120,000 payroll jobs for March, less than in the previous two months. The previously reported February job gain was revised upward by 14,000 jobs, while the January number was revised downward by 9,000 jobs.

The loss of government jobs, which has been a drag on the employment numbers for months, slowed in March. Just 1,000 government jobs were lost in the month. Private sector job gains were broadly based, with manufacturing, health care, and food services among the leaders.

Follow this link to view or download a classroom-ready slideshow of March job market indicators.

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