U-Star

An alternative measure of labour market slack developed by the Federal Reserve that broadens the standard unemployment rate to include marginally attached workers and those working part-time for economic reasons. U-Star (sometimes written U*) provides a more comprehensive view of underutilisation in the labour market than the headline U-3 unemployment figure. Traders and economists monitor U-Star to better gauge the true tightness of the job market and its potential implications for wage growth and Federal Reserve policy.