U-3 vs U-6 unemployment
U-3 is the headline unemployment rate: people without a job who are actively looking. U-6 widens the lens — it adds part-timers who want full-time work and discouraged workers who've stopped searching. The gap between them measures hidden slack the headline misses.
Why the gap matters
Recessions show up differently in the two series: U-3 moves on outright layoffs; U-6 also captures the slower damage — involuntary part-time, workers giving up search entirely. After 2008, U-3 peaked at 10% while U-6 hit 17% — nearly double the visible slack.
Where it shows up
The Sahm rule uses U-3 — the cleaner, lower-noise series — because its 0.5pp trigger was calibrated on the headline. But the U-6 divergence is worth watching around a downturn: a cycle where U-6 stays high while U-3 falls usually means the recovery is weaker than the headline claims.