[jeromec]

It's still a useful number as long as it's measured consistently. It may not be a verbatim reflection of worker to full employment, for example, since it doesn't count "under employed" or the people that want to work more hours, but can't. However, if we know that the 10% it represents is more than triple what we might consider normal then it can be a telling gauge.

[yummyfajitas]

It's very true that the time series Unemployment does not count involuntary part time workers. However, the time series Involuntary Part Time Workers does count people who want to work more hours but can't.

The BLS tracks both these numbers.

http://www.bls.gov/news.release/empsit.t05.htm

I think half the criticism of the unemployment number is simply because people wish one number could explain everything, but unemployment does not.

[btilly]

It's still a useful number as long as it's measured consistently.

Unfortunately it is not measured consistently over long periods of time.

[dsplittgerber]

The government in Germany some years ago messed around with the data and the data set until all appeared well and some parts of the unemployed population - apparantly mostly the long-time unemployed, who have no motivation left to ever leave the welfare benefits system to work again - were just dropped from the data set. Recognize that unemployment data is a government tool. It's one of many interesting data points for one's analysis of the economic situation, but by itself it's pretty meaningless as it's not consistently measured over time.

[Perceval]

Here's an excellent article detailing how the government over the past 40 years or so has been changing the measurements of our basic economic indicators: http://harpers.org/archive/2008/05/0082023

[RyanMcGreal]

There's still a problem: when the unemployment rate starts to fall six months or a year after it spikes, that in itself tells you nothing about whether people are exiting unemployment because they've found jobs or because they've given up looking.

[natevc2]

You could make the unemployment number get "better" by convincing people that they shouldn't try to find a job because the market is so bad.

That is why a lot of people look at the payroll report at the same time. But the payroll report usually comes with large revisions.

[yummyfajitas]

Unemployment does not tell you this, but discouraged workers does.

http://www.bls.gov/news.release/empsit.t13.htm

There are 808,000 such people (as of october), up from 484,000 in october 2008.

[fnid]

Interesting. If you look at those numbers, the amount of people who used to work more is also declining, meaning people aren't earning as much as they used to from more than one job.

[stumm]

If you include discouraged workers (ie. people who aren't looking for work) the rate is actually 17.5%. http://www.bls.gov/news.release/empsit.t12.htm