U6 Watch: September 2014

Vox has two articles on the labor market worth reading, both highlighting recently released data that confronts the misleading U3 unemployment rate. A drop in the U3 unemployment rate is not an entirely positive development because:

• Some of the drop in the U3 unemployment rate continues to reflect a drop in the labor force participation rate. This disproportionately affects female workers and is still vastly underestimated by policy makers and commentators.
• Though the stock market has surged past prerecession levels, wages of typical American workers still have not necessarily recovered. The U3 says nothing about the type of jobs that have replaced the ones lost in the recession. This issue is particularly acute for younger and non-white workers. (see also: this post; U6 watch tag)

Update (10/3): September 2014 saw the lowest labor force participation rate since 1978.