Unemployment Rate

## What this measures

The unemployment rate is the share of the labor force that is unemployed, expressed as a percentage. It is calculated from the Current Population Survey and represents the U-3 measure of labor underutilization.

## Why it matters

The unemployment rate signals the balance between labor supply and demand, which affects wage pressure, hiring costs, and consumer spending power. A tight labor market raises compensation expenses and can constrain growth, while a loose market eases hiring but may signal weakening demand. Organizations use it to anticipate shifts in talent availability, payroll costs, and the health of their customer base.

## How to read it

A rise in the unemployment rate indicates more people are jobless and seeking work, signaling a loosening labor market. A fall suggests fewer people are unemployed relative to the labor force, pointing to tighter conditions. Compare the level to historical averages and to other labor indicators to assess whether the market is slack or constrained.

## What it does not say

This measure does not capture people who have stopped looking for work, those working part-time for economic reasons, or the quality of jobs available. It also does not reveal regional or industry-specific labor conditions.

## Source

The series is published by the Federal Reserve Bank of St. Louis as FRED series UNRATE, drawn from the Current Population Survey. Palanor pulls this series from the FRED API nightly.