Today, the U.S. Bureau of Labor Statistics (BLS) released its Employment Situation report for May 2026, showing that 172,000 jobs were added to the U.S. economy while the unemployment rate stayed the same at 4.3 percent. This increase in jobs came in well above expectations following two months of positive job growth and stable unemployment. Under these headline numbers, however, are continued signs of labor market weakness and underutilization, meaning more Americans are struggling to connect with work.
The BLS publishes five alternative measures of labor underutilization in addition to headline unemployment, and each one highlights that since President Donald Trump took office in January 2025, a growing number of Americans have experienced employment conditions that have left them underemployed or sidelined. In fact, new analysis by the Center for American Progress shows that labor underutilization is above pre-pandemic trends. More Americans are working part-time jobs when they desire full-time hours, have stopped actively looking for work, or have become too discouraged to search at all; and those who are searching for work are experiencing longer spells of unemployment. At the same time, inflation-adjusted wages have fallen over the past year, meaning that even workers with steady employment are losing ground amid rising prices from Trump’s war in Iran and tariff policies.
While headline job gains may dominate the discussion of this jobs report, underlying data trends point to a labor market that a growing share of Americans are finding difficult to navigate.
Definitions of labor market underutilization
For a more nuanced picture of the labor market, several measures of labor underutilization published monthly by the Bureau of Labor Statistics capture Americans who could be in the labor force and potentially employed full time if conditions were better.
Definitions
- In the labor force: All people ages 16 and older who are either employed or unemployed. Those classified as unemployed are not currently employed or available for work and have not actively searched for a job in the past four weeks.
- Not in the labor force (NILF) but want a job: People who are neither working nor actively looking for work but say they want a job. These individuals are not counted in the official unemployment rate because they have not searched for work in the past four weeks.
- Marginally attached workers: A subset of NILF who want a job and have looked for work at some point in the past year but not in the past four weeks. People in this category are closer to the labor market than the overall NILF want-a-job group.
- Discouraged workers: A subset of marginally attached workers who have given up searching specifically because they believe no jobs are available for them for reasons including lack of skills, discrimination, or no openings in their area.
- Part-time workers for economic reasons: People who are working part time but want full-time work and are available for it. This category includes workers whose hours were cut by their employer as well as those who could only find part-time jobs despite wanting full-time employment.
Alternative measures of labor market underutilization
- U-3: The official headline unemployment rate, which counts all people without a job who are actively looking for work as a share of those in the labor force
- U-4: Total unemployed plus discouraged workers as a share of those in the labor force plus discouraged workers
- U-5: Total unemployed plus discouraged workers and all other marginally attached workers as a share of those in the labor force plus all marginally attached workers
- U-6: The broadest measure, which includes total unemployed plus all marginally attached workers and workers employed part time for economic reasons as a share of those in the labor force plus all marginally attached workers
Since the start of the Trump administration, a growing number of Americans have fallen out of the labor force but still want a job
After recovering to pre-pandemic levels by early 2023, the three-month average rate of Americans who are not in the labor force but want a job has been drifting upward, with a rapid acceleration in 2025. In August and September 2025, those who were not in the labor force but wanted a job made up 6.0 percent of the total NILF group—a level not seen since September 2021. (see Figure 1) As of May 2026, the three-month rate stands at 5.8 percent, 0.4 percentage points above the 2018–2019 pre-pandemic average of 5.4 percent, representing nearly 1 million additional Americans. Because the people who fall in this category are not actively job-hunting, the headline unemployment rate does not capture them, but the alternative U-4, U-5, and U-6 unemployment rates do capture this labor underutilization.
The BLS’ alternative measures of labor underutilization each capture a progressively broader slice of labor market weakness. These measures shed light on Americans who have fallen out of the labor market or stepped back from searching and therefore are not counted in the headline unemployment number (U-3), meaning the historically low U-3 rate understates how many people are struggling to connect with work.
Headline unemployment understates the true extent of labor market slack
Across all measures of underutilization, labor market conditions today remain worse than pre-pandemic norms. As of May 2026, the broadest measure of labor underutilization, the U-6 unemployment rate, stands at 8.1 percent, significantly higher than U-3 headline unemployment, at 4.3 percent. While the U-3 three-month average rate has grown faster than the U-6 compared with pre-pandemic averages, the U-6—which includes the unemployed, broader measures of detachment from the labor market, and underemployment measured by involuntary part-time work—has been sitting more than 1 percentage point above where it was just a few years ago.
As of May 2026, the three-month average rate of U-3 unemployment is 13.7 percent above its 2018–2019 average. (see Figure 2) Meanwhile, the three-month average U-4 rate, which captures both unemployed and discouraged Americans, sits 13.6 percent above its pre-pandemic average. Similarly, the three-month average U-5 rate—which includes unemployed, discouraged, and all other marginally attached Americans who have stopped searching entirely—is running 14.4 percent above baseline, indicating that the rise in headline unemployment is partly understated because of this parallel rise in labor force detachment. U-6 unemployment, often referred to as the “real unemployment” rate, sits 8.9 percent above its pre-pandemic average, highlighting that more Americans who have managed to stay in the labor market are settling for involuntary part-time work.
When unemployment spells are broken out by duration, a clear divergence emerges: Short spells of unemployment have nearly returned to pre-pandemic levels, while long-term unemployment remains elevated. (see Figure 3) The three-month average numbers of workers unemployed for fewer than five weeks and out of work for five to 14 weeks currently sit 7.2 percent and 5.7 percent above their respective 2018–2019 average baselines. This trend is markedly worse for longer durations: The three-month average number of workers unemployed for 15 to 26 weeks is 25.5 percent above its 2018–2019 baseline, and those out of work for 27 weeks or more is 43.8 percent above baseline.
Heightened durations of unemployment began to rise in mid-2025. Notably, long-term unemployment—lasting 27 or more weeks—was slightly below its pre-pandemic baseline as recently as 2024, meaning this deterioration is a recent and accelerating trend.
Conclusion
May’s job report offers another positive headline number, but underlying measures tell a less celebratory story for Americans. Although job growth has returned and the unemployment rate remains stable, compared with just a few years ago, a growing share of Americans want work but have stopped searching or are stuck with part-time hours they didn’t choose. And for those who do find themselves out of work, longer spells of unemployment are becoming the norm and remain above pre-pandemic levels. These weaker trends reflect the labor market reality for a growing number of Americans who are not thriving.
The authors would like the thank Kennedy Andara for her support and fact-checking of this analysis, Emily Gee and Christian Weller for their thoughtful review, Bill Rapp for assistance with figure production, and Christian Rodriguez and Steve Bonitatibus for editorial support.