The headline unemployment rate, also known as the U3 measure, can be misleading. Currently, there seems to be some confusion regarding the low rate of unemployment, despite clear signs that there is a weakening of the U.S. labor market. In RiskWire Webcast Episode #38, Veros’ Chief Economist, Eric Fox, and Sr. Research Economist, Reena Agrawal, discuss this topic. They offer several explanations for why the unemployment rate looks the way it does, as well as how it reflects overall labor market dynamics.
Let’s recap the episode’s most important moments:
- The official unemployment rate, otherwise known as the U3 measure, can be misleading. It currently sits at 4.3%; however, it only considers those who are employed and those who are unemployed and actively looking for a job in the past four weeks. Therefore, many people who don’t work are not included in this measure.
- The U6 measure, on the other hand, more accurately represents the slack in the labor force, as it currently sits at 8.1%. This measure includes discouraged workers who are not actively looking for work, as well as part-time employees who would prefer a full-time position.
- Other factors contributing to the low unemployment rate include the decrease in international migration, as well as international student enrollment. It is expected that there will be a decrease in international migration by as much as 525,000 in 2025, slowing labor force growth, and keeping our unemployment rates relatively low.
For further analysis, watch the full episode! Check out RiskWire Webcast Episode #38, today: Webcast & Interviews – RiskWire, powered by Veros
For more information on the housing market and economic trends, visit RiskWire.com! And if you haven’t already seen RiskWire’s Podcast, RiskWire: On the House, be sure to check it out on Spotify, Apple, and YouTube!
