According to the Bureau of Labor Statistics (BLS), the official unemployment rate, known as the U-3 rate, represented about 7.1 million unemployed Americans actively searching for work in June. The measure changed little from the previous month and remains the main indicator used to describe unemployment in the United States.
The headline unemployment figure does not include people who want jobs but have stopped looking, or workers who have part-time positions while seeking full-time employment. These groups are counted differently in government data, which means the official unemployment rate does not capture every form of labor market difficulty.
Labor Force Participation Falls as Fewer Americans Take Part in the Workforce
June’s employment data showed a decline in the share of Americans participating in the labor market. The labor force participation rate fell by 0.3 percentage points to 61.5 percent, while the employment-population ratio declined to 59.0 percent.
These measures track the percentage of Americans who are either working or actively looking for work. A lower participation rate means more people are outside the official labor force, including individuals who may still want employment but are no longer counted among the unemployed.
According to Heather Long, chief economist at Navy Federal Credit Union, the June jobs report contained “some eyebrow-raising data,” particularly because of the large decline in the labor force. She also noted that one month of data does not establish a long-term trend.
The broader U-6 unemployment rate, which includes officially unemployed workers, marginally attached workers and people working part-time for economic reasons, stood at 7.9 percent in June. This measure provides a wider view of labor underutilization than the official unemployment rate.
Involuntary Part-Time Work Reaches a Six-Month High
The number of Americans working part-time because they could not find full-time employment increased in June. According to a Newsweek analysis of BLS data, nearly 1.4 million people were in this category, marking the highest level since December, when the figure reached nearly 1.5 million.
These workers are considered employed in the official unemployment calculation, even when they are unable to obtain the hours, income or type of job they prefer. If these individuals were included in the unemployment rate, the figure would rise to about 5 percent.
The Federal Reserve Bank of San Francisco wrote in November that involuntary part-time employment is typically linked to economic slowdowns, increasing when employers reduce working hours before making broader employment cuts. The institution noted that a high share of workers in this category can indicate that the economy is not using its available workforce fully.
The increase in involuntary part-time employment has drawn attention because it reflects a group of workers who have jobs but remain affected by limited employment opportunities.
Millions of Potential Workers Remain Outside Official Unemployment Figures
Another group affecting the broader labor market picture is made up of marginally attached workers. These are people who want jobs and are available to work but have not searched for employment during the four weeks before the government survey.
According to the BLS, there were approximately 1.76 million marginally attached workers in June. This group included around 477,000 discouraged workers, defined as people who believe jobs are unavailable to them or that barriers prevent them from finding employment.
A analysis found that the number of marginally attached workers reached its highest level since November. The number of discouraged workers also increased to its highest level since January, although it remained similar to June of the previous year and was higher at that point last year.
Heather Long told Newsweek that a difficult environment for job seekers over the past year has led some people to stop searching for work. She pointed to early retirement decisions among some older Americans and challenges faced by some parents seeking flexible roles.
If the 1.76 million marginally attached workers were included in the unemployment rate, it would increase to 5.2 percent. Beyond that group, about 6 million Americans outside the labor force said they wanted a job, and including them would bring the unemployment rate to 7.5 percent.
The June data shows that the U.S. labor market remains more complicated than the official unemployment rate alone suggests. While the figures do not indicate recession-level weakness, declining participation, involuntary part-time employment and workers disconnected from the labor force reveal a wider range of employment challenges across the country.
