Current U.S. Unemployment Rate Statistics and News
How It Compares to Other Unemployment Data
In August 2020, the unemployment rate fell to 8.4%, after skyrocketing to 14.7% in April. The total number of unemployed was 13.55 million. The Bureau of Labor Statistics reports these indicators in the Employment Situation Summary each month.
Most of the unemployed were laid off to limit the spread of the COVID-19 pandemic. Most state governments asked or required nonessential businesses to close. State governments are slowly allowing restaurants, services, and other nonessential businesses to reopen.
In March, before the pandemic, the rate was between 3.5% and 4.5%, the natural rate of unemployment. Employers were having trouble finding enough workers to keep operating at full capacity.
April's unemployment rate, in perspective, was the highest since the Great Depression. In 1933, the unemployment rate reached a record of 24.9%. Unemployment remained above 14% for nine years, between 1931 and 1940. April's unemployment rate reached that level in just a month.
During the 2008 recession, unemployment peaked at 10% in October 2009. In 1982, unemployment rose to 10.8%. These were devastating recessions. High unemployment levels lasted for years. Although the current unemployment rate is high, it is not expected to remain at this level for years. Scientists are rushing to create a vaccine, although this could take months. Once a vaccine becomes widely available, the economy is expected to bounce back.
Unemployment Rate in Detail
The number of unemployed people who were jobless less than five weeks was 2.28 million in August. It had been 14.3 million in April. That's almost 62% of the unemployed. It's a very high proportion, but it makes sense. Most of the unemployed were laid off in the last weeks of March and April.
The number of long-term unemployed rose to 1.62 million. Those are people who have been searching for jobs for 27 weeks or more.
The real unemployment rate was 14.2%. This alternate measure of unemployment, known as U-6, is often called the real rate because it includes people who would like a better job. It also includes those who are underemployed and marginally attached.
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%. It's improved since April's low of 60.2% but is lower than the rate of 63.2% in August 2019. 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 Rate and the Jobs Report
The August unemployment rate and the jobs report numbers told the same story of a recovering economy. They don't always because they are taken from two different surveys.
The unemployment report and the jobs report vary by a tenth of a point here and there. Those are not a cause for alarm. These are estimates, and they are revised as more data comes in. Pay more attention to long-term trends, which appear over several months.
How to Use the Unemployment Rate
Keep in mind that the unemployment rate is a lagging indicator. It tells you what has already happened. Employers only lay off workers after business has already slowed.
The unemployment rate hasn't lagged as much during the pandemic because it all happened so suddenly.
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
You can put this most recent report into perspective by viewing the unemployment rates since 1929. The chart below tracks the monthly unemployment rate since 2014. You can see how it fell below the natural rate of unemployment after March 2017. Since the pandemic, it's skyrocketed way past the natural rate.
U.S. Bureau of Labor Statistics. "Employment Situation Summary Table A." Accessed Sept. 4, 2020.
U.S. Bureau of Labor Statistics. "Labor Force, Employment, and Unemployment, 1929-39: Estimating Methods." Page 2, Table 1. Accessed Sept. 4, 2020.
U.S. Bureau of Labor Statistics. "Unemployment Rate," Select "Unemployment Rate." Accessed Sept. 4, 2020.
U.S. Bureau of Labor Statistics. "Table A-15. Alternative Measures of Labor Underutilization." Sept. 4, 2020.