Fox's Varney Responds To Positive Jobs Report By Pushing "Real Unemployment Rate" Falsehood

Fox's Varney Responds To Positive Jobs Report By Pushing "Real Unemployment Rate" Falsehood


Fox Business host Stuart Varney reacted to a positive jobs report for the month of October by asking for a report on the "real unemployment rate," which he claimed is "technically known as U-6." But the economic indicator that Varney is referring to, known as U-6 is not an unemployment measure as it includes part-time workers who want full-time work.

On November 2, the Bureau of Labor Statistics (BLS) issued a report showing that in October, the unemployment rate rose slightly to 7.9%, but the economy added 171,000 jobs, including 184,000 in the private sector. In a special Fox & Friends segment, Varney responded to the positive report by asking Fox Business correspondent Peter Barnes to "look, please, at the real unemployment rate, I think it's technically known as U-6":

But despite Fox's repeated claims that the U-6 is the "real unemployment rate," it is not a substitute for the official unemployment rate.  

A February 10 post quoted BLS spokesman Gary Steinberg explaining that "the agency does not refer to U-6 as any kind of 'unemployment rate,' real or otherwise":

Romney calls the U-6 number the "real unemployment rate," but BLS spokesman Gary Steinberg said the agency does not refer to U-6 as any kind of "unemployment rate," real or otherwise, because it includes people who are employed, albeit part-time. The U-3 figure is the "official unemployment rate," Steinberg said, and has been calculated the same way for decades.  

In a 2010 post for the conservative Heritage Foundation, research fellow Rea S. Hederman noted that the U-6 rate is often used for its "shock value" because the rate is consistently higher than the official unemployment rate: 

The problem, however, is that this number is startlingly high only in relation to the levels of unemployment that the official unemployment rate -- the much more restrictive U-3 figure -- has accustomed us to seeing. The chief utility of the U-6 rate for anyone but labor economists, then, is often just its shock value.

For economists, these last two definitions of unemployment can help provide some insight into labor-market movements. In particular, the spread between U-5 and U-6 can show how quickly businesses are returning to normalcy after a recession, because it offers a way to gauge changes in the number of hours worked as well as in the number of workers hired. An increase in U-6, meanwhile, can provide evidence that employers are shifting more workers to part-time schedules in response to declining economic conditions. But beyond these limited assessments, the significance of the U-5 and U-6 numbers is far from clear -- and surely not as great as many commentators recklessly suggest.

Although Varney promoted the U-6 as the "real unemployment rate," he failed to note that the rate decreased in the October report from 14.7% to 14.6%.

Posted In
Economy, Jobs, Wages, & Unemployment
Fox News Channel
Stuart Varney
FOX & Friends
Jobs Report
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