Lunchtime Must-Read: Jared Bernstein: How the Jobless Rate Underestimates the Economy’s Problems

Jared Bernstein: How the Jobless Rate Underestimates the Economy’s Problems: “Why not just look at the unemployment rate and call it a day?…

…Because special factors in play right now make the jobless rate an inadequate measure of slack. In fact, at 6.1 percent last month, it’s within spitting distance of the rate many economists consider to be consistent with full employment, about 5.5 percent…. First, there are over seven million involuntary part-time workers… up two percentage points from its pre-recession trough… the unemployment rate doesn’t capture this dimension of slack at all…. Second… participation…. Economists have scurried about trying to figure out how much of the three-percentage-point decline in the labor force participation rate… to attribute to… structural… factors…. Jan Hatzius… another 1.6 million people worth of slack…