The U-6 rate, which measures underemployment, recently rose to 8%, its highest reading since 2021. The gauge reflects individuals working part-time, people on temporary layoff, and those who have stopped looking for jobs due to challenges in finding full-time employment.
Jefferies chief US economist Thomas Simons joins Market Domination hosts Josh Lipton and Julie Hyman to explain that this metric has become more relevant again, following its peak popularity during the financial crisis.
"By definition, it has more volatility, so the range month to month can be relatively high," Simons explains, noting that a significant portion of the increase comes from people working part-time for economic reasons.
Simons attributes this rise to "policy uncertainty" rather than a "fundamental deterioration" in the labor market.
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This post was written by Josh Lynch