Glossary term
U-6 Unemployment Rate
The U-6 unemployment rate is the broadest BLS labor-underutilization measure, including unemployed, marginally attached, and involuntary part-time workers.
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What Is the U-6 Unemployment Rate?
The U-6 unemployment rate is the broadest labor-underutilization measure published by the U.S. Bureau of Labor Statistics. It includes unemployed people, people marginally attached to the labor force, and people working part time for economic reasons.
U-6 is broader than the headline unemployment rate, known as U-3. It is often used to understand labor-market slack that may not show up in the official unemployment rate alone.
Key Takeaways
- U-6 is the broadest BLS alternative measure of labor underutilization.
- It includes the unemployed, marginally attached workers, and involuntary part-time workers.
- It is usually higher than the headline U-3 unemployment rate.
- Economists use it to gauge hidden weakness or slack in the labor market.
- It is still a rate with definitions and limits, not a complete picture of household financial stress.
What U-6 Includes
The official unemployment rate counts people without jobs who are available for work and have actively looked for work within the defined survey period. U-6 adds groups that are economically relevant but excluded from the headline measure.
Those groups include people marginally attached to the labor force, such as discouraged workers, and people working part time because their hours were cut or they could not find full-time work. The denominator also expands to include the civilian labor force plus marginally attached workers.
U-3 Versus U-6
Measure | Includes | What It Helps Show |
|---|---|---|
U-3 | Unemployed people as a share of the civilian labor force | Headline unemployment |
U-6 | Unemployed, marginally attached, and involuntary part-time workers | Broader labor underutilization |
How Economists Read It
U-6 can rise when layoffs increase, when discouraged workers stop actively searching, or when employers cut hours instead of eliminating jobs. It can fall when more people find full-time work, part-time workers get the hours they want, or marginally attached workers reconnect with employment.
The gap between U-3 and U-6 can be informative. A wide gap may suggest that the headline unemployment rate understates labor-market strain. A narrowing gap may suggest that job quality or hours are improving, not just the number of employed people.
Household and Market Context
For households, U-6 connects to income stability, wage pressure, and bargaining power. A labor market with low U-3 but elevated U-6 may still leave many workers underemployed or uncertain about hours.
For markets and policymakers, U-6 can influence views on consumer spending, inflation pressure, and the strength of the business cycle. It is one input among many, alongside payroll growth, wages, labor-force participation, job openings, and initial claims.
The Bottom Line
The U-6 unemployment rate is a broad measure of labor underutilization. It helps show underemployment and marginal labor-force attachment that the headline unemployment rate can miss, but it should be read alongside other labor indicators.