Posted 2 years ago on Oct. 5, 2012, 4:22 p.m. EST by hazencage
This content is user submitted and not an official statement
The government never phased out the U6 number, but instead they simply rely on U3 because it is a number that is more indicative of future economic developments. Many economists actually rely on the U1 unemployment series when it comes to making predictions about a possible recession occurring. On the other hand the U3 unemployment rate is a medium number that combines both U2, and U1, but does one more important thing, and this being that it includes the amount of unemployed seeking employment. Hence, the U3 unemployment figure could be used to estimate how many more individuals are likely to be employed in the future because the figure excludes those whom are not actively seeking employment. This is important if the economy is growing, because then it is more likely these individuals will get employed and henceforth it would also become safer to assume that consumer spending will pick up as well as the U3 figure begins to drop.
Finally their are many conservatives whom point out the U6 figure, but at the same time talk as if inflation is going to be a future problem. So then how is inflation going to pick up if so many individuals are receiving less pay checks, and therefore spending less? Sorry Conservatives you cant have it both ways.