"My guess is that there’s considerably more slack [in the US labour market] than the unemployment number might lead you to suspect, but the truth is that I don’t know."
Timothy Lane, deputy governor Bank of Canada, has an estimate that agrees with Paul's guess. He says (in a talk at Carleton University):
"Chart 11: There's more labour market slack than the unemployment rate suggests in Canada and U.S."
[Now how do I copy and paste Chart 11 from a PDF into Typepad? Stephen? Please help!]
"To consolidate the information contained in the various labour market measures shown in the preceding section, we construct a labour market indicator (LMI) for both countries using a statistical technique known as principal component analysis. This technique extracts the common movement across the eight labour variables to create a simple summary measure of labour market activity. The LMI is scaled to be comparable with the unemployment rate, and thus provides a simple benchmark against which to judge whether the unemployment rate is evolving in a manner consistent with broader labour market conditions."
Now, the Bank of Canada's LMI doesn't necessarily tell us what we need to know either. But it's probably better than looking at the unemployment rate alone.
That's all folks.