The most important financial asset for most working Americans is a career. Our careers represent skills that we, in effect, rent to companies or individuals in exchange for money—which constitutes employment. If no one is exchanging money with you for your skills or services, you are unemployed.
According to information released by the Bureau of Labor Statistics at the beginning of February 2017, the US unemployment rate is 4.8%. This is only slightly higher than the 4.6% reported at the beginning of December 2016, which was the lowest level since August 2007.
This is a vast improvement over the 10% unemployment rate of the Great Recession. Seemingly, things appear to be reasonably good, as 19 of 20 people who want a job have one.
However, unemployment numbers, like other statistics, are more nuanced than they might seem at first glance. For example, the average hourly earnings for American workers in January was $26.00. Over 2016, this average rose by 2.5 percent . However, it is still lower than you might expect in an economy where there appears to be tight competition for workers.
One explanation for the low wage growth is that part of the drop in unemployment was the result of people getting new jobs, but a larger part was people dropping out of the labor force. The total labor force was 157.03 million in the US in January 2015. By November 2016 it had risen to 159.49 million, a 2.5 million worker increase. However, 4.8 million new worker-age Americans were hired during the same time, so why did the number of people employed only rise 2.5 million?
The bottom line: people are giving up on finding jobs faster than they’re being hired. The Labor Department identified 532,000 “discouraged workers” in January. These are people who are not currently looking for work because they don’t believe any jobs are available for them.
The US unemployment rate of 4.8% includes potential workers all across the country. But what if you want to know the figure for adult men and women over age 20? Or for people with a high school diploma vs. those who are college-educated?
The Labor Department breaks down these figures in some detail. Much of the actual joblessness is found in the teenage population, age 16-19 years, where unemployment runs at 15.0% overall. Americans 25 years and older have an unemployment rate of just 3.9%—a figure you probably won’t see anywhere in the headlines.
Also note that Asian Americans have a rate well below the national average (3.7%), white Americans have a higher but still below-average rate (4.3%), while unemployment rates are higher for Hispanics (5.9%) and African-Americans (7.7%).
Or look at the figures by education, and you see the value of a diploma or degree. The rate is three times higher for people who never graduated from high school (7.7%) than for people who graduated from college (2.5%). The unemployment rate for high school graduates is 5.3%, over twice as high as that for college grads.
Then there are state and regional variations. At the end of 2016, New Hampshire had the lowest unemployment rate in the US at 2.6%, with South Dakota and Massachusetts tied for second at 2.8%. The highest rate, 6.7%, was in Alaska. Knowing there are plenty of jobs in Boston may not mean much to you if you happen to live in Juneau.
Statistics can’t tell the full story of unemployment, which ultimately comes down to millions of individual experiences. No matter where you live and what demographic categories you fit into, your best protection against unemployment may be to keep investing in your career.