Probably the most memorable scene in that movie is between Tom Cruise and Jack Nicholson. Cruise, confronting Nicholson on the witness stand during a military hearing, yells “I want the truth!” To which Nicholson replies, “You can’t handle the truth!”
Which brings me to unemployment. Really. Well, besides the fact that I will use any excuse to quote from a good movie, it seems the government thinks we can’t handle the truth.
That’s the number of unemployed in Idaho from the third quarter of 2013 through the second quarter of 2014. “But Mitch,” you say, “I just saw numbers for July that show Idaho’s unemployment rate is just 4.7 percent and third quarter of 2013 through the second quarter of 2014 shows 5.6 percent.”
Well, that is the standard measure used by the Bureau of Labor Statistics, the U3 measure. Many economists, though, now believe that U3 is NOT an accurate measure for unemployment. Instead, the 11 percent, the U6 number, is the way true unemployment should be measured.
Here’s the difference; U3 unemployment is partially based on a monthly survey of 60,000 households, and counts only people who reported looking for work in the past four weeks.
Is that a fair way of tracking economic recovery, basing it on unemployment numbers? Is it really as simple as surveying 60,000 households and counting just those who have looked for work during a month’s time?
Simply, no. U6 numbers are a much better metric in looking at economic recovery. U6 takes into account the U3 numbers, plus workers who have quit looking for a job but are available and those employed part time for economic reasons who had to settle for those jobs, but in reality would like to work full time.
I’m not saying unemployment isn’t dropping, because it is. Even U6 numbers are beginning to drop.
But I am saying next time you see a report about unemployment in Idaho, or even the entire country, take it with grain of salt.
Government, both state and federal, should be able to trust us with the more accurate U6 figure even though it will be higher and, therefore, not as good news as a U3 figure.
We CAN handle the truth!
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