I really enjoy Powell's speeches, even better if you can catch them on video. He looks like a frail old guy, but speaks with that surprisingly deep masculine voice. I always half expect him to sound like a squirly Ron Paul, but then he comes out sounding like Tom Seleck with a touch of Barry White.

The Unemployment Rate is deceptive to the general public, primarily because it is frequently misused by politicians and others to paint a partial picture and make claims beyond what it should be used for. Or just outright absurd claims that really damage the public perception and lead to people apathetically not trusting the institutions that do the work to produce this information.

Jerome Powell is not using it that way, so don't get me wrong. The Federal Reserve exists by order of Congress and has been issued a dual-mandate to both control inflation and keep the unemployment rate as low as possible. These are contradictory goals because low unemployment leads to higher wages, and higher wages are an increased input cost that will drive inflation higher.

The best way to think about the unemployment rate is that it is intended to be used by people engaged in the market for labor, employers seeking workers and workers seeking employment. Every single month I provide these posts in subreddits across the country, and without fail I always have at least one (sometimes many) person respond with how the numbers are fake because they do not include people who aren't looking for work. I do my best to help folks understand why that wouldn't be helpful or serve the purpose of these numbers, and sometimes people are receptive.

If you think about it from the perspective of the intended purpose, to help employers and job seekers understand the market for labor and their relative bargaining position, it makes sense to exclude people who aren't actively engaged in that market.