U3, the official unemployment rate, is an inadequate gauge of labor-market slack and the extent to which it misinforms varies substantially over the business cycle. The U6 unemployment rate is usually about 4 percentage points above U3. However, during the Great Recession it exceeded U3 by 7...

The official U.S. unemployment rate is an inadequate measure of actual labor market conditions. This poses a major challenge for researchers and confuses both the public and policy makers. A new definition of unemployment is proposed. It considers those part-time workers who would like to work...