> The reason is that the unemployment rate isn't really intended as a measure of how well the economy is functioning,
> but how much slack there is in the labor market from an employer's point of view. People who are "marginally attached" to the labor force are mostly
> outside the wage-setting mechanism. Their skills are likely to be marginal or rusty, and of significantly less interest to potential bosses.
> Greenspan looks at what he calls the "pool of available workers," which is the officially unemployed plus those counted as "not in labor force - want job now"
> (that is, they've dropped out of the LF, but not too far out). That number is less than the officially unemployed - at the peak of the boom it was around 75% as l> large as the officially unemployed; now it's around 60%.
From a political point of view, the unemployment rate IS one measure of 'how the economy is functioning'.
More importantly, from a social, as well as political, point of view the unemployment rate is used as a proxy for 'how well is the economy doing for the common man'. Thus my comments that the U-6 rate should be taken as THE unemployment rate (in addition to my argument that from logic and from first principles the U-6 in fact DEFINES what an unemployment rate is trying to measure.)
If what you say above were the whole truth, and let me say that I have great respect for your opinions, then the monthly employment rate wouldn't be so widely disseminated and discussed in the popular media -- rather it would remain within the purview of some technical economics journal.
Btw, a bit of confusion at what you wrote above: how can 'the pool of available workers', comprising the officially unemployed PLUS "those counted as not in labor force - want job now", be less than the offically unemployed ? i.e. how can A + B < A, if both A and B > 0 ?
Ira