On Friday, the U.S. Bureau of Labor Statistics was due to release the monthly Employment Situation report, which is the benchmark for the headline unemployment rate, the the data has been delayed by the shutdown. Headline, or U-3, unemployment is a measure of how many members of the workforce — defined by the BLS as the set of Americans who are both eligible and willing to work — are actively seeking employment. In August, this was 11.3 million people, or 7.3 percent of the American labor force.
The headline unemployment rate can be misleading, and it often paints a rosier picture of labor market conditions than is called for. The headline rate doesn’t include marginally attached or discouraged workers — those who are underemployed and those who have given up on searching for a job. What’s more, the headline unemployment rate is sensitive to changes in the labor force participation rate, or the share of all adults who are willing and able to work, be they already employed or looking.
As of August, the labor force participation rate was 63.2 percent, down from 63.4 in July and substantially lower than its pre-crisis level of about 66 percent. This reduction in the labor force participation rate has helped reduce the headline unemployment rate without actually raising the overall level of employment or improving the health of the labor market.