unemployment rate

Tomorrow, the Bureau of Labor Statistics is set to release the first major report of economic data that was delayed by the federal government shutdown: the September 2025 employment situation report. It’s good that we will get that information, but notice that we’re now in the middle of November and we’re just now learning what the unemployment rate was in the middle of September — 2 months ago (you can see their evolving updated release calendar at this link). This is less than ideal for many reasons, including that the Federal Reserve is trying to make policy decisions with a limited amount of the normal data.

What about the October 2025 unemployment rate? Early indications from the White House are that we just will never know that number. Why? Because the data likely wasn’t collected, due to the federal government shutdown. There was some confusion about this recently, with many people asking why they don’t just release it. Well, that’s because they can’t release what they don’t collect: the unemployment rate comes from the Current Population Survey, a joint effort of the BLS and Census where they interview 60,000 households every month. The survey was not done in October. It would not be impossible to do this retroactively, but the data would be of lower quality and, again, quite delayed. That gap in a series that goes back to 1948 wouldn’t be the end of the world, but it is symbolic of the disfunction of our current political moment.

What about GDP? We are now over half way through the 4th quarter of the year, and… we still don’t know what happened with GDP in the third quarter of 2025. BEA is in the process of revised their release calendar too, but they haven’t yet told us when 3rd quarter GDP will be released. In this case, the data was likely collected, but there is a certain amount of processing that needs to be done. Sure, we have estimates from places like the Atlanta Fed’s GDPNow model, but the trouble is… many of the inputs it uses are government data which haven’t been released yet for the last month of the quarter.

Eventually, all will mostly be well and back to normal, even if there are a few monthly gaps in some data series. The temporary data darkness may be coming to an end soon, but I fear it will not be the last time this happens.

At the end of 2023 I asked: was 2023 the greatest labor market in US history? I presented some data to suggest that, yes, maybe, probably, it was the greatest labor market in US history.

That post was partly inspired by critics of the unemployment rate as a broad measure of labor market utilization. Yes, the UR isn’t perfect, and it misses some things. But other measures of labor force performance tend to move with the UR, and so it’s still a useful measure. 2023 saw not only some of the lowest unemployment rates in US history (rivaling the late 1960s), but also some of the highest employment rates (only beat by the late 1990s). Wage growth was also robust. And other measures of unemployment, such as the much broader U-6 rate and the Insured Unemployment Rate, were also at record low levels (though the data doesn’t go back as far).

Today I learned about a very interesting, though I think probably confusing, measure called the “true unemployment rate.” Produced by the Ludwig Institute, it uses the same underlying data source (the CPS) that the BLS uses to calculate the unemployment rate and other measures mentioned above. This “true” rate is definitely intended to shock you: it suggests that 25 percent of the workforce is “unemployed.”

But they aren’t actually measuring unemployment. What they are doing, in a sense, is combining a very broad measure of labor underutilization (like the U-6 rate mentioned above) with a measure that is similar to the poverty rate (but not exactly). They count people as unemployed if they are part-time workers, but would like to work full-time (U-6 does this). But they also count you as unemployed if you earn under $25,000 per year. Or if you don’t work at all, you are counted as unemployed — even if you aren’t trying to find a job (such as being a student, a homemaker, disabled, etc.). The entire working age population (ages 16+, though they don’t tell us the upper limit, we can probably assume 64) is the denominator in this calculation.

So again, this is attempting to combine a broad measure of employment with a poverty measure (though here poverty is defined by your own wage, rather than your household income). So of course you will get a bigger number than the official unemployment rate (or even the U-6 rate).

But here’s the thing: even with this much broader definition, the US labor market was still at record lows in 2023! Given this new information I learned, and that we are now through 2024, I decided to update the table from my previous post:

From this updated table, we see that by almost every measure, 2023 was an excellent year for the US labor market. The only measure where it slightly lags is the prime-age employment rate, which was a bit higher in the late 1990s/2000. Real wage growth was also quite strong in 2023, despite still having some lingering high inflation from the 2021-22 surge.

How about 2024? By almost all of these measures, 2024 was slightly worse than 2023. And still, 2024 was a good year. A pretty, pretty good year for the labor market. And while the UR ticked up in the middle of the year, it has since come back down a bit and is now right at 4%. As for the “true” unemployment rate, it followed a similar pattern, ticking up a bit in mid-2024, but by December it was back slightly below the level from December 2023.

Alternative “true” measures of the economy rarely give us any additional information than the standard measures — other than a shocking, but confusing, headline number.