The unemployment rate published by Bureau of Labor Statistics (BLS) undergoes criticize. According to BLS, unemployment rate decreased from its highest, 10.1% last October, to 9.7% now. However, critics argue that this rate is inaccurate because it does not count those discouraged workers and involuntary part-time workers. Keith Hall, commissioner of BLS, mentions that because of the consistency, 60,000 rotating sample households are being surveyed. Moreover, U3 number, the official unemployment rate, does not include discouraged workers and part-time workers. Thus, people should look into U6 number which includes the components that U3 does not have to get more in depth information. Nevertheless, the data of discouraged workers are only being collected only quarterly. If the counting method can be improved, Hall would like to increase the sample sizes in order to get a more accurate rate.
The unemployment rate keeps high for a long time. A dropping rate is a good news for our economy. However, the rate could not truly reflect the actual situation. If the discouraged workers and involuntary part-time workers are included, the unemployment rate will be much higher than now. It is a serious problem when the States’ government underestimates the rate. The policies of the government and the actual economy may not match. Thus, people may suffer from unemployment or underemployment. Although Hall maintains that people can look into U6 number to get more information, so the government should use this most comprehensive number. Furthermore, only 60,000 sample households cannot reflect the actual economy. As Hall said, the sample sizes are really needed to enlarge to reveal more accurate situation.
Government makes decisions based on some analysis and index. However, the official unemployment rate is underestimated. Can the government still rely on this unemployment to make decisions? [continues]
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