 One of the most important measures of economic health is the unemployment rate. Behind this single number are millions of people looking for a new way to make a living. It also helps to shape effective policies. The Federal Reserve uses it to steer the economy. Jobs are often the defining political issue for Congress and the president. That's why having an accurate measure of joblessness is really important. Otherwise, these policies will be badly targeted. Problem is, the official unemployment rate doesn't give us a full picture of the job market's health. Luckily, we can use a survey the government already conducts to fix it. All we have to do is listen to what people are already telling us. Okay, so why is calculating unemployment so hard? Just out of everyone who doesn't have a job, right? Well, that rate would currently be about 40%. That's higher than in the Great Depression. That seems off, and it's because if that were our method, we'd be counting students, retirees, people with disabilities, and a bunch of others who aren't looking for a job. That's because what we're really interested in is the rate of involuntary joblessness. The amount of people who don't have a job, but wish they did. So how do we know who wants a job? Well, we asked them. Each month, the Bureau of Labor Statistics surveys 60,000 households to gather a bunch of information about the job market. The answers to this survey determine the official unemployment rate you hear reported in the news. This is sometimes called the headline rate, or in official econ speak, the U3 rate. Here's how it works. If you have a job, your count is employed. Easy peasy. Don't have a job? Well, you're not unemployed yet. There's one follow-up. Are you actively seeking a job? If the answer to both of those is yes, then you are unemployed under the official definition. Together, the employed and unemployed form the labor force. The number of unemployed is divided by the labor force, and boom, that's U3, the official unemployment rate. But remember, many people aren't in the labor force. They're actually in a third group you might have never heard of called the inactive. The inactive is a large part of the population, and it's mostly those students' retirees and others who don't want a job. But thanks to the same survey, we know some of the people included here do want a job. They've just stopped actively looking, and because of that, U3 doesn't count them. The BLS knows the U3 rate isn't perfect, so there's also a U4 rate, which has a broader measure of unemployment. For this rate, the BLS adds in people who've stopped looking for work because of problems in the job market. There's even a U5 rate, which adds in anyone who's stopped looking for personal reasons like illness or issues with transportation. But all these rates leave some people who want a job still counted as inactive. Now there is one more measure, the U6. It adds in part-time workers who want full-time jobs. But adding in these workers muddies the issue of joblessness. Remember, joblessness is what we're really interested in measuring. So U3, 4, and 5 don't count everyone who wants a job, and U6 confuses the idea of joblessness. That's why we need a new Goldilocks rate, the one that's just right. Call it the Comprehensive Jobless Rate, or U5B and EconSpeak. This unemployment rate is very simple. It counts every person who says they want a job and is able to work. Importantly, it also counts the people who gave up looking for work a long time ago, which the other measures ignore. In other words, the U5B fully captures involuntary joblessness for the first time. The difference in rate may seem small, but it reflects millions of people. With this rate, not only would we have a better sense of the health of the job market and our economy, but we could also craft more effective job policies. To learn more about unemployment, including the puzzle of inactive primage men, visit mercatus.org.