REPORT Economic GrowthUnited StatesWorkers

The Anomaly of U-3: Why the Unemployment Rate is Overstating the Strength of Today’s Labor Market


By examining the historical relationship between the unemployment rate and alternative measures of labor market slack, it is determined that today’s labor market has far more slack than is typically associated with an unemployment rate of 5.0 percent. It is therefore unlikely that the economy is at or near full employment.

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