What Is the Current U.S. Unemployment Rate?

The unemployment rate was 3.6% in April 2022

Young man barista with face mask and gloves standing in coffee shop, disinfecting tables.

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Unemployment is one of the most critical economic issues facing the country as it continues to grapple with the impacts of the pandemic.

The unemployment rate reached 14.8% in April 2020 after federal and local governments shut down the economy. That was the highest level of unemployment since the Great Depression.

April 2022's unemployment remained steady at a rate of 3.6%, nearly matching pre-pandemic levels of 3.5% in February 2020. The April unemployment rate matched that of March.

Notably, December 2021 marked the first time the unemployment rate has dropped below 4% since the beginning of the pandemic, so April's numbers continue the positive trend.

Employment conditions continue to improve, but 10.2% of adults said that their households often didn't have enough to eat in the last seven days, according to data collected from March 30, through April 11, 2022.

The sectors with the biggest job gains included leisure and hospitality, manufacturing, and transportation and warehousing. There were 78,000 jobs added in leisure and hospitality in April, smaller than March's gain. the industry is still 1.4 million workers short of where it was before the pandemic in February 2020.

The manufacturing sector saw an increase of 55,000 jobs. Transportation and warehousing added 52,000 jobs, well above the industry's pre-pandemic levels.

The Federal Reserve has estimated that the economy would hit a 3.8% unemployment rate in 2022, and 3.5% in 2023.

Overall, the number of unemployed persons is 5.9 million. The number of unemployed is down and is approaching the numbers seen before the pandemic—5.7 million in February 2020.

The Unemployment Figures in Detail

The total number of unemployed in April 2022 is down 428,000 from February 2022. The number of long-term unemployed (those searching for jobs for 27 weeks or more) decreased to 1.5 million.

The real unemployment rate was 7% in April, 0.1 percentage points higher than in March. This alternate measure of unemployment, known as U-6, gives a broader definition of unemployment. It includes people who would like to find 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 in April 2022 includes 456,000 discouraged workers, increasing from 373,000 in March 2022, and down from 562,000 a year ago. 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 in April 2022 mostly held steady from the month prior, decreasing by 0.2 percentage points. 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.

The number of unemployed doesn't match the number of jobs lost, because these reports are taken from completely different sources. 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.

Companies resist hiring new workers when a recession is over, until they can be sure that the economy will stay strong. The economy could improve for months, and the recession could be over before the unemployment rate drops. It's not suitable for predicting trends, but it's useful for confirming them.

Recent Unemployment History

You can check the unemployment rates since 1929 to put November's report into perspective,

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

Unemployment rose to 10.8% in November 1982, dropped to 3.8% in April 2000, then peaked at 10% in October 2009. These two recession-driven spikes resulted in elevated unemployment levels that lasted for years.

Key Takeaways

  • The unemployment rate was 3.6% in April 2022, which was the same as the month prior.
  • This is just higher than unemployment before the pandemic, which was around 3.5%.
  • Some of the biggest gains came in leisure and hospitality, manufacturing, and transportation and warehousing.

Frequently Asked Questions (FAQs)

How is the unemployment rate calculated?

The U.S. Bureau of Labor Statistics (BLS) calculates unemployment as the percentage of the eligible workforce not currently employed. Eligible workers are those age 16 or older who were available to work full time and actively looked for work in the past four weeks. Temporarily laid-off workers are also counted.

How does a high unemployment rate affect the economy?

Although high unemployment is a lagging indicator that demonstrates other economic problems, it can also cause economic damage of its own. When workers aren't participating in the economy, the gross domestic product will suffer, reducing economic growth. It can also create health problems among unemployed workers, leading to increased healthcare costs down the road. Studies have shown that sustained high unemployment can also cause long-term damage to workers' earning potential and wealth.

What was the lowest unemployment rate in U.S. history?

The U.S. reached its lowest unemployment rate in 1944, when unemployment was only 1.2%.

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