Glossary · Economy
Unemployment rate
The unemployment rate is the share of people who want a job and are looking for one but do not have one, out of everyone working or looking.
Also called: unemployment, jobless rate, U-3
October 2026. Average since 1948: 5.7%.
Oct 2026.
Adds discouraged and involuntary part-time workers, Oct 2026.
In plain words
Picture 100 adults who either have a job or are actively looking for one. If 96 are working and 4 are searching, the unemployment rate is 4%. People who are not looking at all, like full-time students, retirees or parents at home, are not counted as unemployed; they are outside the labor force.
In the US the number comes from a monthly survey of about 60,000 households by the Bureau of Labor Statistics, usually published on the first Friday of the next month. In October 2026 it was 4.1%: about 7.1 million people.
Since 1948 it has ranged from 2.5% (May 1953) to 14.8% (Apr 2020).
Example
Who counts as unemployed?
- Maria lost her job and sent out applications this week: unemployed.
- Sam gave up looking because he thinks there are no jobs: not unemployed but a “discouraged worker”, outside the labor force. The broader U-6 rate counts him.
- Lee works 10 hours a week but wants full-time work: employed. U-6 counts him as underemployed.
- In a town of 1,000 adults, 600 work, 30 are like Maria and 370 are students, retirees or like Sam: unemployment = 30 ÷ 630 = 4.8%.
The official rate (U-3) counts only people like Maria. U-6 adds people like Sam and Lee, so it is always higher: 7.9% in Oct 2026.
One level deeper
To count as unemployed you must have no job, be available to work and have looked for one in the past four weeks, or be waiting to be recalled from a layoff. Working even one hour for pay in the survey week counts as employed.
Some unemployment is normal: people switch jobs, graduate, move. Economists call the lowest rate an economy can keep without pushing up inflation the natural rate, often put at around 4% to 4.5% for the US today.
Unemployment jumps in every recession and falls slowly afterwards. It is also very uneven: rates for teenagers and for people without a high-school diploma run several times those for college graduates.
US unemployment since 1948
The official rate jumps in every recession and drifts down in expansions. The broader U-6 rate, published since 1994, runs several points higher.
The numbers behind the chart
| Date | Unemployment rate (U-3) | U-6 (broadest) |
|---|---|---|
| Jan 1948 | 3.4% | — |
| Dec 1950 | 4.3% | — |
| Dec 1960 | 6.6% | — |
| Dec 1970 | 6.1% | — |
| Dec 1980 | 7.2% | — |
| Dec 1990 | 6.3% | — |
| Dec 2000 | 3.9% | 6.9% |
| Dec 2010 | 9.3% | 16.6% |
| Dec 2020 | 6.7% | 11.7% |
| Dec 2022 | 3.5% | 6.6% |
| Dec 2023 | 3.8% | 7.2% |
| Dec 2024 | 4.1% | 7.6% |
| Dec 2025 | 4.4% | 8.4% |
| Oct 2026 | 4.1% | 7.9% |
Why it matters
It is the clearest sign of how the economy feels to ordinary people, and maximum employment is one of the Federal Reserve’s two goals (the other is stable prices).
A rising rate often signals a recession. One rule of thumb, the Sahm rule, flags a recession when the three-month average rises half a point above its low of the past year.
Long spells without work do lasting harm: skills fade and lifetime earnings fall.
A common mistake
Myth: The unemployment rate counts everyone without a job.
In fact: It counts only people who are actively looking. Students, retirees and people who have given up searching are outside the labor force, which is why economists also watch the participation rate and the broader U-6 rate (7.9% in Oct 2026).
Questions people ask
What is a normal unemployment rate?
Around 4% to 5% for the US in recent decades. The average since 1948 is 5.7%; the lowest was 2.5% in May 1953.
What is the difference between U-3 and U-6?
U-3, the official rate, counts people with no job who looked in the past four weeks. U-6 adds people who want a job but stopped looking and part-timers who want full-time work: 7.9% against 4.1% (Oct 2026).
Which country has the lowest unemployment?
Rates are not perfectly comparable across countries, but our unemployment by country page ranks them with the International Labour Organization’s modeled estimates.
Read more on BigCapital
About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- US recessions (NBER business cycle dates): National Bureau of Economic Research (NBER), Business Cycle Dating Committee: US Business Cycle Expansions and Contractions.
- Number of unemployed persons: U.S. Bureau of Labor Statistics, Current Population Survey (household survey), series UNEMPLOY; retrieved from FRED, Federal Reserve Bank of St. Louis.
- Unemployment rate: U.S. Bureau of Labor Statistics, Current Population Survey (household survey), series UNRATE; retrieved from FRED, Federal Reserve Bank of St. Louis.
- Unemployment rate U-6 (incl. part-time for economic reasons, marginally attached): U.S. Bureau of Labor Statistics, Current Population Survey (household survey), series U6RATE; retrieved from FRED, Federal Reserve Bank of St. Louis.
- BLS published no household-survey figures for October 2025; that month is missing from the series.
- This page explains a term. It is not investment advice.