Functional Unemployment Rises as Official Metrics Stagnate

The TRU, which accounts for involuntary part-time workers and those earning poverty-level wages alongside the traditionally jobless, rose 0.5 percentage points last month. Despite this consecutive monthly increase, the three-month moving average of 24.1% suggests the labor market is currently stabilizing compared to the higher volatility observed late last year. Prime-age workers between 25 and 54 years old saw a slight improvement, with their rate dropping to 17.2%.

Demographic data reveals a fractured recovery across the workforce. The rate for White workers jumped 1.3 percentage points to 23.1%, while Hispanic workers saw an increase of 1.2 percentage points to 28.9%. Black workers, however, experienced a 2.2 percentage point improvement, bringing their rate to 27.1%, though this remains higher than their standing a year ago. Gender disparities also persist; the TRU for men increased to 20.8%, whereas the rate for women held steady at 28.8%.

LISEP Chair Gene Ludwig emphasized that headline statistics often mask the severity of financial strain on households living paycheck to paycheck. He noted that policymakers must prioritize the quality of employment over simple job creation to address the ongoing disconnect between official reports and the lived reality of many Americans.