LISEP: 25.2% of US workforce now 'functionally unemployed'
A new Ludwig Institute report says 25.2 percent of workers are jobless, underemployed or earning poverty-level wages, up from 24.8 percent in November, while the official unemployment rate is 4.4 percent.
- LISEP's True Rate of Employment or TRU hit 25.2 percent in December, the highest level since June 2021.
- The Bureau of Labor Statistics reported 50,000 jobs added in December and an unemployment rate of 4.4 percent with about 7.5 million people unemployed.
- LISEP defines functional unemployment to include underemployment and poverty-level wages and argues official measures understate labor market weakness.
- Some economists question LISEP's methodology and the usefulness of the TRU as a formal economic indicator.
- TRU rose for Black and Hispanic workers to 29.6 percent and 28.5 percent respectively, while it fell to 23.2 percent for white workers.
- Women had a higher TRU at 30.3 percent compared with 20.5 percent for men.
- Forecasters expect sluggish hiring and elevated job cut announcements to persist into 2026.