Work, Wages, and Well-Being

Headline unemployment: Low rates don’t show the whole picture

The most widely used labor market indicator by economists, financial analysts, and politicians is the headline unemployment rate. This counts all unemployed workers who have actively looked for a job in the past two weeks as a share of everyone in the labor force. A headline unemployment rate below 5 percent is generally taken to indicate a strong labor market. Typically, when the headline unemployment rate goes above 5 percent, it spikes up dramatically indicating a major economic event, as depicted in the chart below during the dot com bubble, the 2008 financial crisis, and the onset of the COVID-19 pandemic.

While headline unemployment is the most common way to look at the labor market, there are serious limitations in considering only headline unemployment. The headline unemployment rate does not account for people who are unemployed and want a job but have stopped searching because they’re discouraged, people who want to be working more hours, or workers who are working multiple jobs because they can’t find a single job that pays enough to make ends meet. For these reasons, the headline unemployment rate generally overstates the ability of workers to find a job. Other more comprehensive unemployment measures are available, but they are updated much less frequently and are not readily available at the state level.[1]

Share of total population working: Decline over time shows fewer jobs are available relative to the working age population

Another way to look at the job market is to look at the percentage of the total working-age population[2] with jobs. Economists call this the employment-population-ratio. This measure is helpful to look at in addition to the unemployment rate because it doesn’t exclude “discouraged” workers — meaning people who aren’t employed but have stopped actively looking for work.  It does have some limitations: like headline unemployment, this indicator doesn’t account for underemployment, meaning people who have a part-time job but want a full-time job. On its own the ratio also doesn’t show whether changes are driven by economic factors, like a recession, or demographic factors, like an aging population. But the long-term trend of this percentage gives an indication of the overall health of the economy. As this percentage declines over time, that means that there are fewer jobs available relative to the size of the working age population.

Monthly and yearly changes: Comparing jobs figures to the past month and year shows short-term economic trends

A good way to get a sense of shorter-term trends in the job market is to look at the percentage change in key figures. Large monthly and yearly percentage changes in double digits can indicate significant economic events. For instance, a large positive monthly percentage change in headline unemployment often indicates that a recession has begun or is in effect.

County and metropolitan jobs data: Local data gives a more complete picture of the economy statewide

We can also look at changes in employment at the local level. This is important because national and state-level aggregates can mask dramatic differences on the ground. This can be due to significant events that only affect certain regions, like climate disasters, or to regional differences in where industries are located. For instance, economic development policies that incentivize manufacturing investment in rural areas might cause substantial job growth in rural communities, while leaving urban centers mostly unaffected. These sorts of localized differences matter for sound policy choices, such as responding to economic crises and developing effective workforce development programs to ensure communities have access to quality jobs.

The table below displays the change in employment since last year in major metropolitan areas in NC. It gives a sense of the areas that are experiencing job growth and job loss.

The map below shows the headline unemployment rate by county. It gives an indication of where people who are unemployed and actively searching for work are having the most difficult time finding a job. But remember, the headline unemployment rate doesn’t include “discouraged” workers — meaning people who aren’t employed but have stopped actively looking for work.

The table below displays the changes in various employment figures over the past year at the county level. Unlike the prior table that focuses exclusively on metropolitan areas, this table includes all 100 counties in North Carolina, rural and urban alike.

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[1] The most comprehensive unemployment measure (called the U-6 unemployment rate) looks at all unemployed and underemployed workers, including people who are looking for work and have actively searched anytime during the past year, as well as people who are working part time but want to be working full time. The U-6 unemployment rate is generally 3 to 8 percent higher than headline unemployment. For example, as of June 1, 2025, the national headline unemployment rate is 4.1%, while the U-6 unemployment rate is 7.7%. That means that as of June 1, 2025, over 13 million people in the US are unemployed or underemployed.

[2] The total population includes noninstitutionalized civilians ages 16 and over. It excludes active duty members of the military, people who are incarcerated, and people living in skilled-nursing facilities or other hospital group quarters. See https://www.bls.gov/cps/definitions.htm#population.