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The Actual U.S. Unemployment Rate Was 24.4% in May 2020

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  • John Komlos

Abstract

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 full time as 62.7% employed and 37.3% unemployed, inasmuch as this is the proportion of time they worked relative to full-time workers prior to the pandemic. In addition, in contrast to the BLS, we consider those workers who are wanting to work but have not searched for work within the prior month as being unemployed. We find that the actual unemployment rate in May 2020 was 24.4% or 183% of the headline rate of 13.3%.

Suggested Citation

  • John Komlos, 2020. "The Actual U.S. Unemployment Rate Was 24.4% in May 2020," CESifo Working Paper Series 8383, CESifo.
    • Handle: RePEc:ces:ceswps:_8383
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    References listed on IDEAS

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    1. Coibion, Olivier & Gorodnichenko, Yuriy & Weber, Michael, 2020. "Labor Markets During the Covid-19 Crisis: A Preliminary View," Department of Economics, Working Paper Series qt7rx7t91p, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    2. Andrea Brandolini & Eliana Viviano, 2016. "Behind and beyond the (head count) employment rate," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 657-681, June.
    3. Miguel Faria-e-Castro, 2020. "Back-of-the-Envelope Estimates of Next Quarter’s Unemployment Rate," On the Economy 87740, Federal Reserve Bank of St. Louis.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    covid-19; pandemic; unemployment rate; labor market slack; discouraged workers; involuntary part-time workers;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • J49 - Labor and Demographic Economics - - Particular Labor Markets - - - Other
    • J69 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Other

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