The unemployment rate is the number of unemployed persons divided by the labor force. The labor force is the sum of employed and unemployed workers; in this case, the labor force is (155,604,000+6,197,000)=161,801,000. Therefore, the unemployment rate is 6,197,000161,801,000×100%=3.83%.
The U-4 measure of labor underutilization adds discouraged workers to the ranks of the unemployed (and, thus, to the labor force):
U-4 | = | 100×6,197,000+434,000161,801,000+434,000 |
| = | 4.09% |
If discouraged workers were included in the official unemployment rate, the reported unemployment rate would rise. Similarly, excluding discouraged workers from the official measure of unemployment may mask the true extent of underemployment in the economy.