Ludwig Institute Puts July Functional Unemployment at 24.9% as Official Rate Falls to 4.1%
Updated
Updated · Fortune · Aug 30
Ludwig Institute Puts July Functional Unemployment at 24.9% as Official Rate Falls to 4.1%
3 articles · Updated · Fortune · Aug 30
Summary
24.9% of the labor market was “functionally unemployed” in July under LISEP’s measure, marking a fourth straight monthly increase and a 1.3-point rise since March.
4.1% was the official July unemployment rate, but that gauge has been falling partly because retirements and Trump’s immigration crackdown are shrinking the labor force rather than signaling broad hiring strength.
53.8% of the working-age population was not functionally employed, including people outside the labor force, up 0.8 point since the start of 2026.
31% of women were functionally unemployed in July—the highest since March 2021—while men’s rate fell to 19.5%, a gap LISEP linked in part to family-care strains and male-heavy demand in construction and skilled trades.
The divergence matters for policy: Fed officials, seeing low headline unemployment and low jobless claims, are focused on inflation even as LISEP warns the labor market may be weakening beneath the surface.