Using data from the St. Louis Federal Reserve
(FRED) (http://research.stlouisfed.org/fred2/),
analyze the labor force and unemployment.
a. Find the most recent values from FRED
for these four variables: (1) Unemployed
(UNEMPLOY), (2) Civilian Employment
(CE16OV), (3) Employment Level – Part-
Time for Economic Reasons, All Industries
(LNS12032194), and (4) Not in Labor
Force, Searched for Work and Available
(LNU05026642).
b. Using the most recent values, compute the
official unemployment rate.
c. It has been argued that the official unemployment
rate understates the degree of
joblessness because of the narrow definition
of who is counted as unemployed. A broader
measure, which includes as unemployed
those who work part-time for economic reasons
and those who were available for work
but not actively searching, is also computed
by the BLS. Using data from above, compute
this broader rate of unemployment.
d. The difference between the official rate and
the broader rate changes over the course of
the business cycle. Explain what would be
expected to happen to this difference during
recessions as opposed to expansions.