What Is the U-6 Unemployment Rate?

The U-6 unemployment rate is one of six measures of unemployment published by the U.S. Bureau of Labor Statistics (BLS) as part of its monthly Employment Situation report. Among these six alternative measures, U-6 is considered the broadest. It includes not only those who are officially unemployed (as defined in the standard U-3 rate) but also individuals who are underemployed or marginally attached to the labor force.

Understanding the U-6 unemployment rate can provide a more comprehensive picture of the labor market, especially during periods of economic stress or recovery. While the headline unemployment figure (U-3) is most often cited in the media, U-6 helps economists, policymakers, and analysts evaluate the health of the job market in more nuanced terms.

Definition and Components

The U-6 unemployment rate includes several categories of workers:

1. Officially unemployed: Individuals who are jobless, actively looking for work, and available to start work. This is the same population captured in the U-3 unemployment rate.
2. Marginally attached workers: People who are not currently in the labor force but have looked for a job within the last 12 months and are available for work. This group includes "discouraged workers" who have stopped looking for work because they believe no jobs are available for them.
3. Part-time for economic reasons: Workers who are employed part-time but want and are available for full-time work. These individuals are sometimes referred to as "involuntary part-time workers."

By combining these groups, the U-6 unemployment rate reflects both unemployment and underemployment in the economy.

How It Is Calculated

The U-6 unemployment rate is expressed as a percentage of the total labor force, adjusted to include marginally attached workers. The formula can be broken down as follows:

U-6 = (Unemployed + Marginally Attached + Part-time for Economic Reasons) / (Labor Force + Marginally Attached Workers)

This calculation broadens the labor force denominator beyond what is used in U-3, which helps to account for individuals who are on the edges of labor market participation.

The data used to calculate U-6 is drawn from the Current Population Survey (CPS), which surveys approximately 60,000 U.S. households each month. This survey asks individuals about their employment status, hours worked, and job-seeking behavior.

Importance and Use Cases

The U-6 unemployment rate is often used to assess the level of labor market slack. In other words, it reveals how many people are not being fully utilized in the economy—whether because they are unemployed, discouraged, or working part-time when they would prefer full-time employment.

This broader measure is especially important during economic downturns or periods of recovery, when underemployment and marginal attachment to the labor force tend to rise. Policymakers at the Federal Reserve, for instance, sometimes reference the U-6 rate when assessing the true state of employment and making decisions about interest rates or monetary stimulus.

In labor market research, the U-6 rate also helps contextualize the limitations of the headline U-3 figure. For example, a falling U-3 rate might signal a strengthening labor market, but if U-6 remains elevated, it suggests that many workers are still not finding adequate employment.

Limitations and Criticism

While U-6 offers a more expansive view than U-3, it is not without limitations. One criticism is that it may overstate labor market weakness by including people who are only marginally seeking work or who are voluntarily working part-time. Not all part-time workers classified as "involuntary" may be actively seeking full-time positions. Some may report availability for full-time work but not be engaged in a robust search.

Another issue is that the U-6 rate, like all unemployment statistics, is based on self-reported survey data, which can be subject to misreporting or interpretation bias. Furthermore, U-6 does not capture individuals who have not looked for work in the past 12 months, even if they are otherwise willing and able to work. This means some long-term discouraged workers are still excluded from the count.

Despite these limitations, U-6 remains a valuable complement to the headline unemployment rate. When viewed alongside U-3 and other labor market indicators, it adds meaningful context to public discussions about employment and economic health.

Historical Context

During major recessions, such as the Great Recession of 2007–2009, the U-6 unemployment rate surged to much higher levels than U-3, highlighting a significant increase in underemployment and labor market detachment. At its peak in 2010, the U-6 rate exceeded 17%, compared to a U-3 rate of around 10%.

More recently, during the COVID-19 pandemic in 2020, U-6 again demonstrated its value by capturing a sharp rise in involuntary part-time work and marginal labor force attachment that was not fully reflected in U-3. These examples illustrate how the U-6 rate can serve as a more sensitive gauge of economic distress.

The Bottom Line

The U-6 unemployment rate is the broadest official measure of labor underutilization in the United States. By accounting for discouraged workers and involuntary part-time employees, it gives a more complete picture of labor market health than the standard unemployment rate. While not perfect, U-6 is an essential tool for evaluating the real-world impact of economic conditions on workers and for understanding the complexities of employment beyond simple job counts.