Is The Unemployment Rate Broken? : Planet Money Economist Jared Bernstein thinks it's about time we admit that the unemployment rate is not as useful as it used to be. He offers three alternative indicators.
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Is The Unemployment Rate Broken?

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Is The Unemployment Rate Broken?

Is The Unemployment Rate Broken?

Is The Unemployment Rate Broken?

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Spencer Platt/Getty Images
NEW YORK, NY - JUNE 01: A store advertises that they are hiring in lower Manhattan on June 1, 2018 in New York, New York. (Photo by Spencer Platt/Getty Images)
Spencer Platt/Getty Images

"Full employment" — it's that magical point where everyone in the economy who wants a job has a job... and ideally the right job. Economists disagree about exactly where that point is, but for decades it was generally accepted that once the unemployment rate fell below a certain number, that was how you knew that you'd hit full employment. Various numbers have been thrown out over the years: 6%, 5%, 4%.

But today unemployment is hovering just above 3% and economists still aren't sure we've hit full employment. So is it possible that that unemployment rate is not as useful an indicator as it once was? That's what Economist Jared Bernstein thinks, so today on the show he's brought us 3 alternative indicators that just might do a better job of helping us pinpoint where full employment really is.

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