>What ever the implied relationship is between weekly new unemployment claims
>and the actually number of workers not working has changed in recent years,
>just as p/e ratio norms have changed. Thus it is reasonable to suspect that
>the 4.2% unemployment distorts the true unemployment picture more severely now
>than a decade ago.
What's changed is the narrower coverage of the unemployment benefit system. So, back in the early 1970s, the insured rate was about 70% of the official rate (meaning, that is, that about 30% of the officially unemployed weren't getting benefits); that fell to around 40% in the 1980s/1990s (meaning that 60% of the officially unemployed aren't getting benefits). But there haven't been any changes in either definition or methodology sufficient to make the 4.2% number distort the "true" picture more severely now than a decade ago. I put "true" in quotes because this isn't physics, and the "true" picture of unemployment is extremely sensitive to definitions.
Doug