January 2024: Alternative Measures of Unemployment
by Derek Teed
February 2025
The Bureau of Labor Statistics has developed alternative definitions of unemployment and underemployment (see Table 1). The official unemployment measure, called U-3, is the share of those aged 16 and over who, at the time of the monthly survey, were not employed in the past week and who looked for work sometime in the past four weeks. U-3 excludes anyone who was not seeking work in the past month unless they were temporarily unemployed and have a date by which they will return to the same employer. This group, those not seeking work, is considered not in the labor force. Note that the U-3 number reported in this analysis will differ from the official state unemployment estimate because it is based on a 12-month moving average.
- In January the U-3 stood at 3.4%, which is up from 2.9% one year ago.
The U-4 adds people who want a job but aren't actively searching because they think there are no jobs available that fit their qualifications, also known as discouraged workers, to the count. Discouraged workers are those who have looked for work in the past year but stopped looking in the past month because they think they cannot find a job.
- In January U-4 stood at 3.5% and 3.1% one year ago.
- In January there were 2,900 discouraged workers, which is down from 5,300 one year ago.
U-5 adds all the other "marginally attached" workers, people who looked for work sometime in the past 12 months but, for reasons other than discouragement did not look in the past four weeks, to the count of unemployed.
- In January the U-5 was 3.9% compared to 3.8% one year ago.
The broadest measure of unemployment, U-6, includes all the above and adds people who are employed part-time but want full-time work.
- In January the U-6 was 6.6% in January and 5.4% one year ago.
- In January there were 85,500 involuntary part-time workers, up from 50,400 a year ago.
| Table 1. Alternative unemployment rates in Minnesota as of January 2025 (12-month moving averages) | |||||
|---|---|---|---|---|---|
| Measure* | January-25 | December-24 | January-24 | Monthly Change | Annual Change |
| U-3 | 3.4% | 3.3% | 2.9% | 0.1 | 0.5 |
| U-4 | 3.5% | 3.4% | 3.1% | 0.1 | 0.4 |
| U-5 | 3.9% | 3.8% | 3.8% | 0.1 | 0.1 |
| U-6 | 6.6% | 6.4% | 5.4% | 0.2 | 1.2 |
| Number of Discouraged Workers | 2,900 | 3,600 | 5,300 | -700 | -2,400 |
| Number of Involuntary Part-Time Workers | 85,500 | 81,000 | 50,400 | 4,500 | 35,100 |
*Definitions of Measures:
U-3 Official unemployment rate
U-4 Discouraged plus officially unemployed
U-5 All marginally attached (including discouraged) plus officially unemployed
U-6 Involuntary Part Time plus marginally attached, discouraged, and officially unemployed
Involuntary Part time—a component of U-6, including only persons working less than 35 hours per week who want, but cannot find, a full-time job. Some usually work full-time but are currently working part time. Some usually work part time but would prefer to work full time.
The long-term unemployed
Long-term unemployment—lasting more than 27 weeks —imposes costs on people that go well beyond lost wages, including lower future earnings (see Table 2).
- In January the number of long-term unemployed stood at 16,200 and was up from 7,100 a year ago.
- The share of long-term unemployed rose to 15.3% and was up from 7.8% a year ago.
- The median duration of unemployment were at 9.7 weeks, which is up from 7.2 one year ago.
| Table 2. Long-term unemployment | |||||
|---|---|---|---|---|---|
| Measure* | Jan 2025 | Dec 2024 | Jan 2024 | Monthly Change | Annual Change |
| Number Long-Term | 16,200 | 16,100 | 7,100 | 100 | 9,100 |
| Share Long-Term (%) | 15.3% | 15.7% | 7.8% | -0.4 | 7.5 |
| Median Duration of Unemployment (weeks) | 9.7 | 10 | 7.2 | -0.3 | 2.5 |
*Long term is defined as more than 27 weeks. The share of long term is expressed as a percentage of all unemployed (U-3).
Labor force status by race/ethnicity and gender
The labor force participation rate for Black Minnesotans was 77.4% in January, which is 2.0 points higher than one year ago and well above labor force participation rate for white Minnesotans. The employment to population ratio was 72.6% in January, down from 73.3% a year ago. The unemployment rate was 6.3% in January, up from 2.8% a year ago.
The labor force participation rate for Hispanic Minnesotans was 80.9% in January, up 8.1 points over the year. The employment to population ratio was 77.6% in January, up 8.9 points from one year ago. The unemployment rate was 4.0% in January, down 1.7 percentage points from a year ago.
The labor force participation rate for White Minnesotans was 67.8% in January, up 0.2 percentage points over the year. The employment to population ratio was 65.8%, up 0.1 point from last year. The unemployment rate was 2.9% in January, the same as last year.
The labor force participation rate for Asian Minnesotans was 68.7% in January, down 4.5 points over the year. The employment to population ratio was 66.5%, down 4.9 points compared to last year. The unemployment rate was 3.1% in January, up 0.8 point over the year.
The labor force participation rate for Native American Minnesotans was 57.4% in 2018 to 2022 compared to 68.7% for the total population age 16 and older. The employment to population ratio for Native American Minnesotans was 50.6% compared to 65.9% for the total population, and the unemployment rate was 11.9% compared to 4.0% for the total population. These are annual 5-year data from the American Community Survey and are not comparable to the numbers elsewhere in this article.
Figures 3, 4, and 5 display labor force participation rates, employment to population ratios, and unemployment rates for the total population, Black, Hispanic, Asian and White Minnesotans for the current months, and comparisons to previous years, same month, using 12-month moving averages.
Note: Because of the small sample size for Black, Hispanic, and Asian workers in the Current Population Survey, the unemployment estimate and unemployment rate are subject to high volatility for these groups. The unemployment rate is valuable and meaningful when examined as a long-term trend, not month-by-month.
The labor force participation rate for women was 64.7% in January, which was 0.7 points lower than one year ago. The employment to population was 62.5% in January, down 1.1 points from one year ago. The unemployment rate was 3.4% in January and was up 0.6 points over the year.
The labor force participation rate for men was 72% in January, up 0.6 points from a year ago. The employment to population ratio was 69.6%, up 0.4 points from one year ago. The unemployment rate was at 3.4% in January and was up 0.3 points over the year.
| Table 6. Labor force indicators by gender | ||||||
|---|---|---|---|---|---|---|
| Month/Year | Labor force participation rate | Employment to population ratio | Unemployment rate | |||
| Female | Male | Female | Male | Female | Male | |
| January-2025 | 64.7% | 72.0% | 62.5% | 69.6% | 3.4% | 3.4% |
| December-2024 | 64.8% | 71.8% | 62.6% | 69.4% | 3.3% | 3.3% |
| January-2024 | 65.4% | 71.4% | 63.6% | 69.2% | 2.8% | 3.1% |
| Monthly change | -0.1 | 0.2 | -0.1 | 0.2 | 0.1 | 0.1 |
| Annual change | -0.7 | 0.6 | -1.1 | 0.4 | 0.6 | 0.3 |
Teen Labor Force Status
The teen (age 16-19) unemployment rate was 6.6% in January, up 0.2 points over the year, which, despite the increase, puts the teen unemployment rate close to a record low for January going back to 2002, the beginning of this series. The labor force participation rate was 60%, down 0.9 points from a year ago but at a near-record high. The employment to population ratio was 56.0%, a near-record high for a January going back to 2002.
Note: Because of the small sample size for teen workers in the Current Population Survey, the unemployment estimate and unemployment rate are subject to high volatility. The unemployment rate is valuable and meaningful when examined as a long-term trend, not month-by-month.