Unemployment Rate Statistics

The US unemployment rate has risen from a low of 3.4% to 4.3%. That much of a rise in unemployment has historically tended to mean a recession is inevitable. However, employment isn’t actually falling.    How’s that possible? Most people understandably assume that rising unemployment means that employment IS falling. And when employment falls, people cut back on spending leading to further job cuts. But that’s not currently the case.   Firstly, there are two major surveys which attempt to measure US employment. The establishment survey (from which the much reported non-farm payrolls comes) and the household survey (from which the unemployment rate comes).   The household survey has recently been the weaker of the two, seeing employment go sideways. The establishment survey meanwhile has seen employment continue to rise, although the extent of prior job gains were recently revised down.   But let’s just focus for the moment on the weaker household survey. You can see from the chart below that this measure of employment, used to calculate the unemployment rate, has stopped rising but isn’t falling.   So how has the unemployment rate risen?   Some definitions may help:   To count as unemployed you have to be not employed, available for work and looking for work. The labour force is those who are employed plus those who are unemployed. The unemployment rate is then calculated as the number of unemployed people as a percentage of the labour force.   So unemployment can rise either when people lose their jobs or because of a rise in the supply of available workers looking for work.   At the moment US unemployment is rising because of a rise in the number of those available and looking for work rather than because people are losing their jobs.   That suggests the probability of a recession isn’t as high as it would be if employment was declining.     So in short, the recent rise in the unemployment rate probably overstates the weakness in the US labour market.   That doesn’t mean there aren’t risks to the growth outlook but I think there are risks both to the upside and the downside.   That also means there are two way risks which could mean the Fed end up cutting rates by either more or less than is currently priced in.    I’ll elaborate further on some of the mixed signals coming from the US data in future posts. #economy #interestrates #unemployment 

#Employment fell by 52,800 (0.4%) in February, the largest monthly fall since December 2023, with full-time employment dropping by 35,700 and part-time by 17,000 (although employment was still up by 1.9% form a year earlier. Total hours worked also dropped 0.4% in February (although it was also 2.4% up from February last year). The ABS attributes the drop in employment last month to a larger than usual number of retirements of older workers (more details on employment by age will be available next Thursday). Consistent with this hypothesis, the labour force #participation rate dropped by 0.4 pc pt in February to 66.8%, its lowest level since May last year, and against the generally strong upward trend in labour force participation (especially for women) since 2016. With the decline in employment being mirrored by a 63,900 contraction in the labour force, the #unemployment rate remained steady at 4.1% (well, to two decimal places it dropped from 4.11% to 4.05%, but that's being really picky). It's worth re-iterating that Australia has succeeded in bringing #inflation down from its peak (as measured by the RBA's preferred measure of 'underlying' inflation) of 8.4% over the 12 months to December 2022, to 2.8% over the 12 months to February 2025 (low enough to allow the RBA to begin cutting interest rates) with an increase in the unemployment rate (from its lowest point in October 2022) of just 0.6 pc pt. That's a smaller increase than in any episode of 'disinflation' since at least 1959. The last two major 'disinflations', from peaks of over 10% in the early 1980s and again in the late 1980s, entailed increases in unemployment of over 5 percentage points, as well as outright recessions. That's also a better performance than any of our peers during the most recent inflationary episode. The US comes close - its unemployment rate rose by 0.7 pc pt from its most recent low (in April 2023) to its most recent peak (of 4.2% in November last year) - but it required continued enormous fiscal stimulus (a budget deficit of 6.5% of GDP) to do that, in contrast to Australia's two consecutive (federal) budget surpluses. In Canada and New Zealand, where both countries' central banks raised their cash rates much more than the RBA did, inflation came down more quickly, but at a cost in each case of an increase in the unemployment rate of 1.9 pc point (see chart below) - as well as outright recessions, despite population growth which was even faster than in Australia). So, although the extended period of high (by the standards of the past 20 years) mortgage rates has been painful for the roughly one-third of Australian households with a mortgage, from the standpoint of minimizing the cost in terms of unemployment of getting inflation back down to 'tolerable' levels, the trade-off which the RBA made has paid off pretty well.

The first jobs report with data post-shutdown shows a job market trajectory surprisingly unchanged by the shutdown. The job market is continuing to cool though is not yet showing signs of accelerating deterioration. 🏛️ Payroll employment grew 64,000 in November, but that follows a 105,000 drop in October which was mostly driven by 162,000 federal job losses as the last day for most federal workers under the deferred resignation program was at the end of September. 📈 Private payrolls alone were a little better, growing 69,000 in November and 52,000 in October. In the last 3 months, private payroll growth has averaged 75,000 monthly compared to just 13,000 in the 3 months prior (Jun–Aug). 🩺 Health care & social assistance added 64,000 jobs in November on top of 64,600 in October, which means that all other industries barely contributed any jobs growth in those months. Health care remains a reliable engine of jobs growth, but the narrowness of the base of jobs growth today is concerning. 💵 Average hourly earnings grew just 3.5% year-over-year in November, down from 3.7% in October. That's the slowest pace of wage growth since 2021. There is some evidence that the drop may be driven by noise so we'll want another month of data to confirm the trend. 🔺 Unemployment rose to 4.6% in November, the highest level since September 2021. The share of workers part-time for economic reasons also spiked to 3.4%, a sign that workers are having trouble finding full-time work and hours in a slowing job market. Overall, the jobs report continues to show a cooling job market. Some evidence of firming private payroll growth is positive, but rising unemployment, falling wage growth, and the narrowness of jobs growth raise questions about whether the job market is on solid ground heading into 2026. #jobsreport #economy #news

The U.S. labor market continued to defy expectations, adding 272,000 net jobs in May. However, the upside surprise was driven mostly by demand, not supply, causing wages to inch up 0.4% on a monthly basis, or 4.1% on a year-ago basis. 📊 The data was not a complete surprise to us, as our forecast had denoted a possibility of an upside swing due to seasonal hiring such as leisure, hospitality, and construction, which rose substantially on the month. The other wildcard is government hiring, which was also up by a wide margin in May. 💸 That is not a good sign for rate cut hope this summer. More likely than not, a July rate cut is out of the picture, while the odds for September should be lower now. The first reaction of the market this morning was September is back to being a coin toss at exactly 50%. 📉 In contrast to the topline payroll report, the household survey which produces the unemployment rate data, instead, showed a drop in employment, down 408,000 on the month. That led to a higher unemployment rate at 3.96%, just high enough to break the sub-4% monthly streak that would be the longest since the 1950s. 📉 The labor supply was weaker in May with the labor force participation rate falling to 62.5% from 62.7%, adding to the wage growth pressure. But most of the drop came from 55 or older workers. The prime-age group participation rate continued to go strong, up to 83.6%, the highest since 2002. 📅 It is hard to square today’s data with other economic indicators recently that have pointed to a cooling economy. Maybe one likely explanation is that some of the strength in job gains was seasonal. Of course, it is hard to hang our hat on one month of data, especially when it was the first month of the summer. Our base case remains a cut in September.

July Payrolls: A Disappointing Month Payrolls growth in July disappointed, and the unemployment rate ticked up. Wage growth was stable, but the trend remains elevated vs inflation target pace. 1️⃣ Payrolls rose 73k in July, compared to 14k in June (revised down from 147k). May & June payrolls were revised down by a larger than normal 256k. With the downward revisions near-term payroll growth trends now are below the 111k breakeven pace needed to keep unemployment at 4.2%. Adjusting BLS 2020-25 population projections with higher CBO projections shows the breakeven payrolls pace rose faster over that period (gray vs purple lines in first chart 👇). Payrolls trends have lagged the breakeven pace based on higher CBO projections since late last year (orange vs gray lines👇). Upside risks to the unemployment rate over the near-term have thus increased notably. 2️⃣ The unemployment rate increased 10bps to 4.2% in July. More precisely, it rose from 4.117% in June to 4.247%. Household employment fell 260k. Labor force participation declined for the fourth straight month by 10bps to 62.2%. 3️⃣ Hourly wage growth was +0.3% m/m (same as the upwardly revised rate in June) and 3.8% y/y, also unchanged. For production & non-supervisory workers, July m/m wage growth eased from +0.4% to +0.3%, and in y/y terms from 4% to 3.9% (both June figures revised up). Furthermore: ➡️ July’s data on total and short-term unemployed and employed helps estimate the job-finding rate, which fell notably, as unemployment rose more than new unemployment: odds of exiting unemployment dropped from 49% to 43%. ➡️ Combining job-exit and job-finding rates gives an alternative, flow-consistent unemployment rate that had been rising ahead of the official rate for most of 2024 (second chart 👇). As in June, its smoothed trend suggests stabilization around 4.2% near term. ➡️ Given uneven jobs growth across sectors, adjusting wage growth for sectoral/skill composition is key. Using Atlanta Fed’s method, July m/m wage growth increased to 0.5%, but June was unchanged. For production/non-supervisory workers this correction similarly left official numbers unchanged. Annual wage growth still exceeds rates consistent with 2% inflation and aligns with ~3% inflation implied by recent “Main Street” expectations (final chart 👇). Given a gradually slowing labor market, still elevated inflation expectations and sticky underlying inflation, I expect the Fed to stay on hold this year. Today’s report hints at building downside labor risks that, if sustained over the next two months, could push the Fed to cut in the fall. For more visit Macro Market Notes: https://lnkd.in/eGG_cpfg #jobsreport #wages #federalreserve

EY Macro Pulse -- Resilient job growth but downside risks are brewing 🌤️ 🌧️ Resilient job growth but downside risks are brewing 🏢 At a time of high uncertainty and volatility, the healthy 151,000 payroll gain in February provided some reassurance that the #economy’s foundation is still solid. Yet, significant job growth concentration, soft hours worked, a rise in the unemployment rate and lower labor force participation indicate a continued cooling in labor market conditions. This comes just as a trifecta of headwinds from higher tariffs, large federal job cuts and tighter immigration policy pose downside risks to the outlook. 📊 Private-sector payrolls expanded 140k while government payrolls rose 11k despite lower federal #employment. The private sector added an average of 169k jobs over the past three months, compared to an average of 204k in January. 🏥 #Job growth was concentrated with the healthcare sector accounting for 60% of all services payroll gains. Employment among good-producing industries rose by 34k, the strongest gain since June 2023. 🏛️ The government sector made a smaller contribution to the overall payroll gain , a trend we should grow accustomed to given the ongoing large cuts (#DOGE) to the #federal workforce. In February, a 10k drop in federal government payrolls was offset by a 21k gain in state and local employment. 📈 On the household survey side, the labor market picture was softer. The #unemployment rate edged up a tick to 4.1% in February while the broader U-6 unemployment rate rose 0.5ppt to 8% – its highest level since October 2021 – driven by a jump in the number of people reporting that they are working part-time for #economic reasons. 👥 Another disappointing development was the notable 0.2ppt decline in the labor force participation rate to 62.4%, its lowest level since January 2023. 💸 Wage pressures eased modestly in February with hourly earnings rising 0.3% m/m while wage growth ticked up 0.1ppt to 4.0%, a pace roughly unchanged over the past seven months. With #productivity growth around 2%, the labor market is not inflationary. ⏳ Looking ahead, steep #tariff increases and the surge in uncertainty and volatility could cause job growth to moderate even further than in our baseline, with the risk of triggering a “non-linear” labor market response that would result in a rapid economic downshift. Large cuts to the federal workforce and the cancellations of many government contracts will also be a drag on overall payroll growth in coming months while tighter immigration flows will weigh on labor supply dynamics, further constraining job growth. Job growth is expected to decelerate from 160k per month in 2024 to around 80k per month this year with the unemployment rate rising toward 4.5% in 2024. Read the full note here via EY-Parthenon Lydia Boussour https://lnkd.in/dmpGXN_m

The labor market holds steady, but its cracks are widening. Despite the sharp drop in Government employment during the shutdown, today’s report repeats the same pattern we’ve seen all year: healthcare keeps adding jobs in October and November, while most other sectors remain flat. The unemployment rate rose more than expected, driven mainly by people reentering the labor market (possibly due to the shutdown)—not widespread job loss. Unemployment climbed especially for younger and Black workers. The number of people working part‑time for economic reasons also jumped, likely reflecting shutdown effects. The effects from the shutdown will eventually dissipate from the jobs report. Overall, the report mirrors what we’re seeing in LinkedIn data: a skewed job market with no upward momentum. 1. Payrolls Nonfarm payrolls rose by +64K in November but fell by –105K in October, alongside downward revisions for September (–11K) and August (–22K). October’s steep decline reflects a –162K contraction in Federal government employment due to the shutdown; from September to November, the Federal workforce shrank by 168K. Private‑sector payrolls increased by 52K in November and 69K in October. Healthcare and Social Assistance account for all payroll gains in 2025. 2. Unemployment Unemployment rose to 4.6%, above expectations, driven primarily by reentrants. Part‑time employment for economic reasons surged to its highest level since spring 2021, likely due to the shutdown. Household survey data show employment has fallen by an average of –13K per month this year. 3. Labor Supply & Earnings Labor force participation and employment‑to‑population ratio for 25–54 year olds edged down from September. Wage growth slowed: average hourly earnings decelerated to a 1.6% annualized rate (4.3% for production and nonsupervisory), down from 5.4% (5.0%) in October. The October and November data available suggest no break in the trend of flat labor‑supply growth and limited-to-no wage‑driven inflation pressure. 4. Potential Warning Signals Temp Agency employment fell by –5K, extending a decline that began in early summer. Youth (16–19) and Black unemployment rose more than any other groups. 5. Technical Notes BLS collected no household data for October because the shutdown halted survey operations. October and November response rates are higher than usual, because the collection period was extended. Worth remembering that payroll numbers are always subject to several revisions: annual benchmarking against the larger QCEW survey, late‑arriving monthly data, and annual adjustments to the birth–death model—an update we’ll receive in January and a likely source of the steady negative revisions we’ve seen. #jobsreport #linkedin

Today’s Australian Bureau of Statistics Labour Force data showed that the seasonally adjusted unemployment rate rose slightly, by less than 0.1pt, to 4.1% in June. With employment rising by around 50,000 people and the number of unemployed growing by 10,000 people, the unemployment rate rose slightly to 4.1% and the participation rate also rose, up to 66.9%. The participation rate in June was only 0.1pt lower than the historical high of 67.0% in November 2023. The employment-to-population ratio rose by 0.1pt to 64.2%, which was also close to its historical high of 64.4% in November 2023. The employment-to-population ratio and participation rate both continue to be near their late 2023 highs. This, along with the continued high level of job vacancies, suggests the labour market remains relatively tight, despite the unemployment rate being above 4.0% since April. Unemployment rose by 10,000 people in June, following a fall of 9,000 in May. While it has increased from a low of 491,000 people in October 2022 to 608,000 in June 2024, it is still around 100,000 people or 14.2% lower than just prior to the COVID-19 pandemic. The unemployment rate was 0.5pts higher than June last year, and 1.1pts lower than March 2020. Monthly hours worked rose by 0.8%. The growth rate over recent months was broadly in line with employment. In June, we continued to see more people than usual working reduced hours because they were sick, similar to what we saw in May. Around 4.5% of employed people in June could not work their usual hours because they were sick, compared to the pre-pandemic average for June of 3.6%. However, we also saw less people taking annual leave in June 2024. There were around 12.5% of people working fewer hours because they were on leave, compared with the pre-pandemic average for June of 14.5%. This contributed to the increase in hours worked this month. Consistent with the increase in hours worked, the seasonally adjusted underemployment rate fell 0.3pts to 6.5%. The underemployment rate was 0.1pt lower than June last year, and 2.3pts lower than March 2020. The underutilisation rate, which combines the unemployment and underemployment rates, also fell 0.2pts to 10.5%. While this was 0.4pts higher than June 2023, it was 3.4pts lower than March 2020. For more, see: https://lnkd.in/gV2h6H5U

The good news from the August jobs report is that the labor market isn’t weakening as quickly as July’s shaky report would have you believe. The bad news is that the labor market’s strength keeps fading. Large downward revisions to data from earlier in the summer put the three-month average of job gains at 116,000 per month, lower than the pace needed to simply tread water and below 2019’s average clip. The unemployment rate may have ticked down, but the market’s overall momentum suggests joblessness is more likely to keep rising than to fall. A lifeline from the Federal Reserve in the form of an interest rate cut is likely imminent, but there are questions if it’s coming too late or if it will be strong enough to pull the market back. The unemployment ticked down to 4.2%, as temporary layoff unemployment dropped after spiking in July. A dip in unemployment is something to celebrate, but don’t get overly excited about this decline. The pullback from last month’s spike likely signals that the unemployment rate is back on its former trajectory: a slow, but steady increase. Rising unemployment continues to be driven by more people entering the labor force having a harder time quickly finding a job. That’s a good sign the labor market isn’t on the cusp of imminent collapse, but it does mean its strength is steadily eroding. Payrolls continue to slow down. Over the past three months, job growth has slowed to an average of 116,000. That speed is not fast enough to keep up with current labor force growth and is below 2019’s average pace of 166,000 job gains. The trend has become more concerning after revisions to July and June’s data, bringing down growth in those two months by 86,000. Employers continue to add jobs, but the current pace is approaching stall speeds. This labor market expansion is still salvageable, and its future depends in large part on policymakers' actions. The Federal Reserve is set to cut interest rates later this month. What’s not clear is the scale and speed of the cutting. Help seems like it’s on the way, but we’ll have to see if it will be enough and if it will come in time.

Warning: a wow chart below. For the past two years, young workers (16-34) with an Associate degree and those with a Bachelor's degree have had essentially the same unemployment rate. In the past 12 months: Associate 4.1%, BA 4.2%. This is unprecedented. From 2003 through 2022, the gap between these two groups averaged 1.5 percentage points, with Associate holders always on top. Through the Great Recession, through the long 2010s recovery — a BA always meant meaningfully lower unemployment. No exceptions. That gap has been zero since roughly mid-2024. For young workers choosing between two and four years of college, the job-security premium of a Bachelor's degree has — at least for now — disappeared. What are the explanations? #labormarkets #futureofwork #AI #highered #recruitment #careers