The U‑6 rate

Key takeaways
– The U‑6 rate is the broadest official BLS measure of labor underutilization. It includes unemployed people, those marginally attached to the labor force, and workers employed part‑time for economic reasons (underemployed).
– U‑6 typically runs well above the headline U‑3 unemployment rate and can reveal hidden slack in the labor market that U‑3 misses.
– Policymakers, analysts, and jobseekers can all use U‑6 differently: for policy design, economic diagnosis, and personal career planning respectively.
– Official sources: Bureau of Labor Statistics (BLS), St. Louis Fed (FRED), and periodic analyses (e.g., Gallup). What is the U‑6 (unemployment) rate?
U‑6 is one of six alternative measures of labor underutilization published monthly by the Bureau of Labor Statistics. It captures:
– the unemployed (people without a job who actively searched in the prior 4 weeks),
– the “marginally attached” (people not currently in the labor force who want and are available for work and have looked for a job in the prior 12 months but not in the last 4 weeks), and
– employed persons working part time for economic reasons (those who want and are available for full‑time work but have had their hours reduced or can find only part‑time work). Because it adds the marginally attached and underemployed to the unemployed count, U‑6 gives a broader picture of labor market slack than U‑3 (the official unemployment rate). Composition of the U‑6 rate
– Unemployed (U‑3 numerator): persons without jobs who have looked for work in the prior 4 weeks.
– Marginally attached: includes “discouraged workers” (those who stopped looking because they believe no jobs are available) and others who want work and have searched in the last 12 months but not in the last 4 weeks.
– Part‑time for economic reasons: workers employed part time but preferring full‑time work. How the U‑6 rate is calculated (formula and example)
Formula:
U‑6 (%) = 100 × (Unemployed + Marginally Attached + Employed Part Time for Economic Reasons) / (Labor Force + Marginally Attached) Calculation steps:
1. Start with the official unemployed count (numerator component).
2. Add marginally attached persons to the numerator.
3. Add persons working part time for economic reasons to the numerator.
4. For the denominator, take the civilian labor force and add the marginally attached (but do not add part‑time workers to the denominator because they are already in the labor force).
5. Multiply the resulting fraction by 100 to express as a percent. Illustrative facts (from official reports)
– U‑6 spiked to about 22.9% in April 2020 during the initial COVID shutdowns while U‑3 reached 14.7 (BLS / FRED).
– In January 2020, U‑6 was about 6.9% while U‑3 was 3.5.
– In some monthly reports (e.g., January 2022), BLS published numbers such as marginally attached ≈ 1.5 million and persons working part time for economic reasons ≈ 3.7 million, with U‑6 ≈ 7.1% (seasonally adjusted). Why U‑6 matters — what it reveals beyond U‑3
– Captures underemployment: people working part time for economic reasons are counted as employed in U‑3 but as underutilized in U‑6.
– Captures discouraged and marginally attached workers who are no longer counted in U‑3.
– More sensitive to cyclical weakness early in downturns and to slow recoveries when many workers settle for fewer hours or drop out of the labor force. Factors that drive movements in U‑6
– Business cycle swings (recessions raise underemployment and marginal attachment).
– Structural changes (industry shifts that displace workers or reduce hours).
– Policy changes (unemployment benefits, job training, labor market regulations).
– Other shocks (pandemics, natural disasters) that reduce hours and push people out of active searching. Where to find and track U‑6 (national and state data)
– BLS monthly publications: Table A‑15 (Alternative Measures of Labor Underutilization) in The Employment Situation release contains U‑6 national series.
– BLS Local Area Unemployment Statistics publishes annual average alternative measures by state (the BLS posts state-level annual averages for U‑6; monthly state U‑6 series are not generally published).
– FRED (Federal Reserve Bank of St. Louis) hosts historical U‑6 time series charts and downloadable data.
– Gallup and other research organizations occasionally produce analyses interpreting U‑6 as a “real” unemployment gauge. Where to look (practical navigation steps)
1. For national monthly U‑6: go to the BLS Employment Situation news release → Table A‑15.
2. For state annual averages: go to BLS Local Area Unemployment Statistics (LAUS) and look for “Alternative Measures of Labor Underutilization for States.”
3. For historical charts/downloads: search FRED for “U‑6” or series ID “U6RATE”. The six unemployment/underutilization rates (brief)
BLS publishes U‑1 through U‑6:
– U‑1: persons unemployed 15 weeks or longer as a percent of the civilian labor force.
– U‑2: job losers and persons who completed temporary jobs as a percent of the labor force.
– U‑3: total unemployed (official unemployment rate) as a percent of the labor force.
– U‑4: U‑3 plus discouraged workers divided by (labor force + discouraged).
– U‑5: U‑3 plus all marginally attached workers divided by (labor force + marginally attached).
– U‑6: U‑5 plus persons employed part time for economic reasons (underemployed) divided by (labor force + marginally attached). Practical steps — how to use U‑6 (by audience)
A. For policymakers and economic analysts
1. Monitor U‑6 alongside U‑3 and labor‑force participation to understand both joblessness and underemployment.
2. Decompose U‑6 changes: examine whether movements come from part‑time hours, marginal attachment, or outright unemployment to design targeted policy (e.g., training vs. job creation).
3. Use state and demographic breakdowns (where available) to target workforce programs, re‑training, and employment subsidies.
4. Track U‑6 in real time with FRED and BLS releases and cross‑check with payroll data and hours worked. B. For employers and HR leaders
1. Use high local U‑6 as a signal of available labor but also potential skills mismatches (many part‑time or discouraged workers may lack required skills).
2. Consider targeted recruiting, training, or flexible scheduling (converting part‑time roles to full‑time where feasible) to attract underutilized workers. C. For jobseekers and career counselors
1. If local U‑6 is elevated, expect more competition and more underemployment; consider upskilling or training in higher‑demand areas.
2. Use workforce agencies and job training grants in periods or regions of high U‑6.
3. Track hours worked in your industry: if many workers are part time for economic reasons, aim for employers offering stable full‑time opportunities. D. For researchers and journalists
1. Use U‑6 to provide context behind U‑3 headlines; explain whether job growth reflects rising hours versus more people entering the labor force.
2. Report both U‑3 and U‑6 trends to show whether improvements are broad‑based or narrow. Example scenario (how U‑6 can tell a different story)
– Headline: U‑3 falls from 6% to 4% over a year — suggests improvement.
– U‑6 falls more slowly, or stays flat, because many workers have shifted from full‑time to part‑time or marginally attached workers remain high. That indicates the recovery is incomplete and that many workers remain underutilized. The bottom line
U‑6 is the most inclusive official U.S. measure of labor market slack, capturing unemployment, underemployment, and marginal attachment. It complements the headline U‑3 unemployment rate and is useful for policymakers, analysts, employers, and jobseekers who want a fuller picture of labor‑market health. Watch U‑6 alongside participation and hours‑worked data to assess whether reported job gains reflect meaningful improvements in labor utilization. Sources and further reading
– U.S. Bureau of Labor Statistics, The Employment Situation (Table A‑15: Alternative Measures of Labor Underutilization).
– U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics: Alternative Measures for States.
– St. Louis Federal Reserve (FRED): U‑6 historical series.
– Gallup: analyses referring to U‑6 as a broader “real unemployment” measure.
– Investopedia summary article on U‑6 (background and context).