The Labor Department said Friday the unemployment rate remained flat at 5.3 percent in July—but does that tell the real story?
Many economists look beyond the "main" unemployment rate to other figures that give a more textured view of the economy. On jobs day, the Bureau of Labor Statistics puts out a slew of data that show various aspects of the nation's employment situation.
One is the U-6 rate. The BLS defines U-6 as "total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force" plus all marginally attached workers.
In other words, the unemployed, the underemployed and the discouraged—a rate that remains above precrisis levels.The U-6 rate dipped in July to 10.4 percent, the lowest since June 2008. The overall trend in the U-6 has been more volatile than the main unemployment rate (also know as the U-3). The U-6 rate is down 180 basis points over the last year, versus a 90-basis-point drop in the U-3.
Unemployment rate: 7.5% ● U-6 rate: 14.2% Bureau of Labor Statistics
Another figure is the U-1, which is the percentage of the civilian labor force that's been unemployed for 15 weeks or longer. In July, the U-1 dropped to 2.0 percent, which means that people losing their jobs aren't staying unemployed as long. While the U-1 has a similar historical curve to the above U-6, it's much closer to precrisis levels.
Will these jobs numbers lead the Fed to raise interest rates?
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Economists are scrutinizing jobs figures especially this month amid speculation that the Federal Reserve is waiting for strong gains in jobs and wages to justify an interest rate hike later this year. Fed chair Janet Yellen said in May that while higher wages increase costs for employers, they indicate a strengthening economy that is good for business.
Average hourly wages rose 0.2 percent to $24.99 in July.
Change in average weekly wages: 0.46% ● Change in average hourly wages: 2.44% Bureau of Labor Statistics
