The U‑6 unemployment rate, the broadest measure of labor underutilization reported by the Bureau of Labor Statistics (BLS), is showing signs of upward pressure. Unlike the headline U‑3 rate, which only includes those actively seeking work, the U‑6 figure captures a more complete picture of employment. It includes discouraged workers, marginally attached individuals, and those working part-time for economic reasons.
According to the most recent data from the BLS and the Federal Reserve Bank of St. Louis, the U‑6 rate inched up from 7.7 percent in June 2024 to a recent peak of 8.0 percent in February 2025. Since then, it has remained elevated, recording 7.9 percent in March and 7.8 percent in both April and May. The June 2025 figure dropped slightly to 7.7 percent but remains among the highest levels seen since 2023.
The U‑6 rate tends to rise when more people are involuntarily working part-time or when marginally attached workers reenter the job search but fail to secure full-time employment. These dynamics suggest that while headline unemployment may appear stable—hovering around 4.1 percent in June—the underlying labor market may be more fragile than it seems.
This persistence in underemployment raises concerns about the quality of jobs available, wage stagnation, and economic resilience, particularly for lower-income workers and those in precarious positions. A growing number of Americans want full-time employment but are unable to find it. Others are technically outside the labor force but remain discouraged or marginally attached to it.
In the broader context, the U‑6 rate serves as a counterbalance to optimistic economic narratives. The apparent stability in the U‑3 rate masks lingering vulnerabilities, especially as sectors like retail, hospitality, and education continue to rely heavily on part-time labor or are facing budgetary constraints. For those watching the post-pandemic economy, particularly in relation to student debt, workforce readiness, and higher education policy, these indicators suggest a structural weakness in job creation and labor absorption.
The gradual rise of U‑6 is not just a statistical footnote. It signals that the labor market is not fully healed and that a portion of the population remains economically sidelined. It is a metric worth monitoring as debates around economic recovery, fiscal policy, and employment strategies continue.
For readers of the Higher Education Inquirer, this trend reinforces the need to consider broader employment conditions when evaluating the health of the U.S. economy, particularly for recent graduates, contingent faculty, and other workers navigating a precarious job landscape.
Sources
Bureau of Labor Statistics, Table A-15. Alternative measures of labor underutilization: https://www.bls.gov/news.release/empsit.t15.htm
Federal Reserve Bank of St. Louis (FRED), U‑6 Unemployment Rate: https://fred.stlouisfed.org/series/U6RATE
TradingEconomics, U‑6 Unemployment Rate: https://tradingeconomics.com/united-states/u6-unemployment-rate
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