What Is the Current US Unemployment Rate?

The unemployment rate was 5.2% in August

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The current U.S. unemployment rate was 5.2% in August 2021, the Bureau of Labor Statistics (BLS) said in its monthly report, released September 3, 2021. This unemployment rate was 0.2 percentage points lower than in July.

Unemployment is one of the most critical economic issues facing the country as it balances re-opening with safety more than a year into the pandemic. In April 2020, after federal and local governments shut down the economy, the unemployment rate reached 14.8%, the highest since the Great Depression. While August 2021's unemployment rate is lower, it's still higher than pre-pandemic levels (3.5% with 5.7 million unemployed in February 2020).

While employment conditions continue to improve, 10% of adults say their household doesn't have enough to eat, compared to 3.4% in 2019.

The sectors with the biggest job gains included transportation and warehousing, manufacturing, private education, and professional and business services. Architecture and engineering services led the professional and business services sector with an increase of 19,000 jobs. Couriers, messengers, warehousing, and storage led the transportation and warehousing sector with increases of 20,000 jobs each.

In June, the Federal Reserve estimated that the economy would return to a healthier 4.5% unemployment rate in 2021, 3.8% in 2022, and 3.5% in 2023.

Overall, the number of unemployed is at 8.4 million. While the number of unemployed is down, COVID-19 is still affecting the employment situation—it's still higher than pre-pandemic levels.

The Unemployment Figures in Detail

The total number of unemployed is 8.4 million, lower than July's 8.7 million. The number of long-term unemployed (those searching for jobs for 27 weeks or more) dropped to 3.2 million. A smaller number, 2.1 million, lost jobs within the last five weeks. This number declined by 174,000 from July's 2.3 million.

The real unemployment rate was 8.8% in August, 0.4 percentage points lower than in July. This alternate measure of unemployment, known as U-6, gives a broader definition of unemployment. It includes people who would like a job but haven't looked for one in the past month. It also includes those who are underemployed and marginally attached.

The real unemployment rate contains 392,000 discouraged workers, down from 507,000 in July and 617,000 in June. Discouraged workers are people who have given up looking for work but would take a job if offered. They are not counted in the unemployment rate because they haven't looked for a job in the past four weeks.

The labor force participation rate was 61.7%—there was no change from July. The labor force doesn't include those who haven't looked for a job in the past month. Some would like a job, but others dropped out of the labor force for different reasons. They may have retired, gone back to school, or had a baby.

Difference Between the Unemployment and Jobs Reports

The unemployment rate and figures from the jobs report don't always tell the same story because they are taken from two different surveys.

The unemployment rate is taken from the household survey of individuals. It describes who is employed and who isn't based on their responses.

The number of jobs added is taken from the establishment report, more commonly called the nonfarm payroll report. This survey of businesses describes how many jobs were created or lost by industry.

Since these reports are taken from completely different sources, the number of unemployed doesn't match the number of jobs lost. Those discrepancies are expected, and the estimates are revised each month as more data comes in.

How to Use the Unemployment Rate

Keep in mind that the unemployment rate is a lagging indicator. It tells you what has already happened, since employers only lay off workers after business slows down.

The unemployment rate isn't lagging as much as usual because the pandemic is still creating sudden changes.

When a recession is over, companies resist hiring new workers until they are sure the economy will stay strong. The economy could improve for months, and the recession could be over before the unemployment rate drops. Although it's not suitable for predicting trends, it's useful for confirming them.

Recent Unemployment History

To put the most recent report into perspective, check the unemployment rates since 1929.

Unemployment stayed above 14% for nine years between 1931 and 1940. In 1933, the unemployment rate reached a record of 24.8% after a few years of increasing. April 2020's unemployment rate skyrocketed to 14.7% in only one month.

In November 1982, unemployment rose to 10.8%. During the 2008 recession, unemployment peaked at 10% in October 2009. These were devastating recessions. High unemployment levels lasted for years. This is unlikely to happen during the ongoing pandemic, as unemployment has continually dropped since January 2021.

Key Takeaways

  • The unemployment rate is 5.2%, which is 0.2 percentage points lower than in July.
  • This is higher than unemployment before the pandemic, which was around 3.5%.
  • Some of the biggest gains came in private education, manufacturing, and professional and business services. Retail services continue to decline.