Using data from the St. Louis
Federal Reserve (FRED) (http://research.stlouisfed.
org/fred2/), analyze the unemployment rate.
a. Download monthly data on the U-3 unemployment
rate (UNRATE) and the broader
U-6 unemployment rate (U6RATE) from
1994 to the present. Chart the two data series
in a graph.
b. Calculate the average value and the standard
deviation for each data series from 1994 to the
present. Which measure of the unemployment
is higher on average? Which measure is more
volatile as measured by its standard deviation?
c. Calculate the correlation coefficient between
the U-3 and U-6 measures of the unemployment
rate.
d. Are the unemployment rate data consistent
with the view that the natural rate of
unemployment increased after the 2007-2009
recession? Explain.