R.I.’s unemployment is not worst by every measure

By Patricia Daddona
PBN Staff Writer

Rhode Island’s unemployment rate may be the highest in the nation at 8.3 percent, but a lesser-known metric ranks the state sixth highest – and lends insight into the state’s condition, local economists say. More

To continue reading this article, please do one of the following.



WORKFORCE

R.I.’s unemployment is not worst by every measure

By Patricia Daddona
PBN Staff Writer

Posted 5/26/14

Rhode Island’s unemployment rate may be the highest in the nation at 8.3 percent, but a lesser-known metric ranks the state sixth highest – and lends insight into the state’s condition, local economists say.

That 8.3 percent rate is the standard monthly unemployment rate, known as Unemployment 3, or U-3, one of six metrics used by the U.S. Bureau of Labor Statistics. The so-called U-6 rate, measured quarterly and annually as opposed to monthly, counts populations not typically counted in the standard measure: discouraged workers, marginalized workers and part-timers who would prefer to be working full time, said R.I. Department of Labor and Training Assistant Director Donna Murray.

It’s not the case that the U-6 measurement is any more “real” than the standard unemployment rate, says Leonard Lardaro, an economist with the University of Rhode Island.

“You have to look at what is not counted: discouraged workers, people who have given up searching,” he said. “U-3 assumes if you’re physically able to work but you’re not actually seeking work, then you’re not both willing and able to work, so you’re not counted.”

Instead, says Lardaro, both the U-3 and the U-6 are “statistical glimpses that do different things, and neither is perfect.”

While the U-3 has been the standard because it is simpler to use, Lardaro says, the U-6, which also has been calculated for years, has begun to surface in the news as economists look for deeper insights into the nation’s and individual states’ economic conditions.

“We never had to use [U-6] because we never had any recession as bad as the last one,” Lardaro said. “We had high unemployment rates, but not like this.”

A state’s U-6 is typically higher than its U-3, but the measures move together, so the gap between them shrinks when the economy improves, but increases when the economy slows, said Edinaldo Tebaldi, an associate professor of economics at Bryant University.

In April, The New York Times reported that Dennis Lockhart, the Federal Reserve Bank of Atlanta president, said that tracking U-6 could help explain whether the economy is on a path to recovery. Lockhart indicated that he would be encouraged if the gap between national U-6 and U-3 drops back to the range of 3-4 percentage points it was at before the recession, instead of the 6 point range it is in now.

Next Page
Calendar
PBN Hosted
Events

Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
  • Best Places to Work
    Enrollment is now open for the 7th annual Best Places to Work program. Winners w ...
  • Manufacturing Awards
    Applications are now being accepted for the 2nd Annual Manufacturing Awards. Dea ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement