[Excerpt] The nation’s unemployment rate is widely recognized as a key indicator of labor market performance. This is in large part because of the objective manner in which the concept of unemployment is defined. To be classified as unemployed, a person must be without work, be available for work, and have actively searched for work. The official unemployment statistics have stood the test of time; recommendations from several internal and external reviews have resulted in only minor refinements to the definition of unemployment since its inception in 1940.
It is recognized, however, that no single statistic can reflect all types of labor market difficulties. As a way to help assess labor market conditions from several perspectives, the Bureau of Labor Statistics (BLS) publishes five alternative measures of labor underutilization every month in the Employment Situation news release. Two of these measures are more restrictive than the official unemployment rate, and three are broader, incorporating individuals who are not captured in the official measure. All are constructed using data collected in the Current Population Survey (CPS).