Using an insight from Information Theory, we devised a new metric – the x2y metric – that quantifies the strength of the association between pairs of variables.
The x2y metric has several advantages:
It works for all types of variable pairs (continuous-continuous, continuous-categorical, categorical-continuous and categorical-categorical)
It captures linear and non-linear relationships
Perhaps best of all, it is easy to understand and use.
The BLS releases six measures of labor market slack in the monthly jobs report. These include the official unemployment rate (U-3), discussed above, as well as more narrow definitions, called U-1 and U-2, which respectively include only those unemployed at least 15 weeks (the long-term unemployed) or for less than a month (the short-term unemployed). The BLS also publishes broader definitions of slack. The U-6 rate, for instance, counts all those who are technically unemployed plus those are who are working part-time but would prefer full time work, and those “marginally attached to the labor force,” that is, people who say they want either a full-time or part-time job, have not looked for work in the most recent four weeks, but have looked for a job sometime in the past 12 months. When adults classified as “marginally attached” report that they did not recently seek work because they do not believe jobs are available for them, they are classified as “discouraged workers.” The U-4 counts the unemployed and discouraged workers, while U-5 adds in other marginally attached workers. In January, the broadest of these measures, U-6, stood at 11.1 percent, 4.8 percentage points higher than the official unemployment rate.
