Current US Unemployment Rate Statistics and News
How It Compares to Other Unemployment Data
BY
KIMBERLY AMADEO
Updated June 05, 2020
In May 2020, the
unemployment rate fell to 13.3%, after skyrocketed to 14.7% in April.1 The total number of unemployed was 20.985 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. Many of the unemployed expect to be rehired in the near future. State governments are slowly allowing restaurants, services, and other nonessential businesses to gradually reopen.
Just two months ago, the rate was at the high end of the range of 3.5% to 4.5% or
natural rate of unemployment. Employers were having trouble finding enough workers to keep operating at full capacity.
To give you some perspective, April's unemployment rate is the highest since the
Great Depression. In 1933, the unemployment rate reached a record of 24.9%.2 Unemployment remained above 14% for nine years, from 1931 to 1940. April's unemployment rate reached that level in just a month.
During the 2008 recession, unemployment peaked at 10% in October 2009.3 In 1982, unemployment rose to 10.8%. These were devastating recessions. High unemployment levels lasted for years. Although the current unemployment rate is higher, it is not expected to remain at this level for years. Scientists are rushing to create a vaccine, although this could take 18 months.
The unemployment picture could get worse before it gets better. The Federal Reserve Bank of St. Louis forecasts that unemployment could rise to 30% in the second quarter.4
Unemployment Rate in Detail
The number of unemployed people who were jobless less than 5 weeks fell to 3.875 million. It had been 14.283 million in April. That was 61.9% 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 1.164 million. Those are people who have been searching for jobs for 27 weeks or more.
The
real unemployment rate was 21.2%.5 This alternate measure of unemployment is often called the real rate because it included people who would like a better job. It includes those who are
underemployed and marginally attached.
The real rate also contains 662,000
discouraged workers.
These are people who have given up looking for work but would take a job if it were offered. These people 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 60.8%. 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 May unemployment rate and the jobs report numbers told the same story this month, but 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 the course of 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 if the business has already fallen.
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 December 2015. Since the pandemic, it's skyrocketed way past the natural rate.
