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Notes -
It's not so much that they are arbitrary, but interpreting them is hard, subjective, or imprecise.
I think a lot of this is down to incentives. Nobody wants to be the government that gives a bad economic report. You don’t want to be up for election when crime is up or unemployment is high or inflation is high. So there’s a lot of pressure on the agencies making these reports because your boss is a political appointee and making his elected boss look bad is going to hurt his career. As such, people are using formulas that are inaccurate and almost always in the direction of making the boss look as good as you can get away with. Which is pretty easy when you can change the formula to suit the purpose. Unemployment rates are hot garbage because basically it’s only counting people actively seeking work within a 3 month timeframe. Which means that if you’re not actively filling out applications, you’re not unemployed. This obviously doesn’t count people who are discouraged or retraining because their old skills became useless. U6 is more useful because it counts all workers available, and if anything overcounts as a full time student is counted even if he doesn’t want a job at all.
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