---
title: "The Other Unemployment Rate Finally Dipped, to a Still-Alarming 24.3%"
description: "The Ludwig Institute’s measure of the ‘functionally unemployed’ eased in August after four straight months of climbing"
author: "Penny Quirke"
published: 2026-09-26T00:45:10.596Z
modified: 2026-09-27T03:05:40Z
url: https://rews.cc/a/the-other-unemployment-rate-finally-dipped-to-a-still-alarmi-6f129b
language: en
tags: ["economy", "unemployment", "labor", "inflation", "jobs", "us"]
publisher: "Rews (https://rews.cc)"
---

# The Other Unemployment Rate Finally Dipped, to a Still-Alarming 24.3%

*The Ludwig Institute’s measure of the ‘functionally unemployed’ eased in August after four straight months of climbing*

By Penny Quirke · September 26, 2026 · https://rews.cc/a/the-other-unemployment-rate-finally-dipped-to-a-still-alarmi-6f129b

## In brief

- LISEP’s True Rate of Unemployment fell 0.6 points to 24.3% in August, still above January’s 23.9%
- The BLS headline unemployment rate held unchanged at 4.1% in August
- TRU Out of the Population, covering labor force dropouts too, fell 0.6 points to 53.2%
- The TRU for women dropped 1.6 points to 29.4%; rates were little changed across racial groups
- LISEP’s Gene Ludwig said gains must continue and become broadly shared to confirm the trend

Here is a small mystery of American bookkeeping: according to the U.S. Bureau of Labor Statistics, unemployment in August stood at 4.1% — a number politicians quote the way people quote their cholesterol when the cholesterol is good. According to the Ludwig Institute for Shared Economic Prosperity, a Washington think tank, the more truthful figure is nearly six times that, at 24.3%. Both outfits are measuring the same country in the same month. The disagreement is over what the word ‘unemployed’ ought to mean.

LISEP’s yardstick is called the True Rate of Unemployment, or TRU, and it counts the ‘functionally unemployed’: people who are jobless, people stuck working part-time because full-time work isn’t available, and people working full-time for a poverty wage. In the government’s headline ledger, that second and third group counts as employed, full stop — which is how you get a 4.1% unemployment rate coexisting with a labor market that, for roughly one worker in four, is not actually working out.

The news in August, for a change, moved in the encouraging direction. [LISEP’s True Rate of Unemployment](https://www.lisep.org/tru) fell 0.6 percentage points, from 24.9% to 24.3% — the first decline after four consecutive months of increases. The rate had climbed 1.3 points from March through July, and even after August’s improvement it remains slightly above January’s 23.9%. Progress, then, in the precise medical sense: the patient has stopped getting worse.

LISEP’s second gauge is even bracing-er. The TRU Out of the Population measures the share of all working-age Americans — including those who have given up and left the labor force entirely — who are not functionally employed. That figure also fell 0.6 points, to 53.2%, a drop the institute says matches the improving labor force participation rate reported by the BLS. But let the number itself land for a moment: by LISEP’s arithmetic, more than half of working-age Americans are either not working, not working as much as they want to, or working for poverty-level pay.

LISEP Chairman Gene Ludwig sounded like a man deliberately refusing to throw a parade. “We’re pleased to see functional unemployment move in the right direction this month,” he said. “What matters now is whether that improvement continues and, ultimately, whether more Americans are able to find the kind of work that provides real economic security for themselves and their families.” The coming months, he added, should make clear whether the improvement is actually taking hold.

Under the hood, August’s gains were oddly distributed. Across racial groups the TRU barely budged: it fell 0.1 points to 27.2% for Black workers, rose 0.4 points to 27.1% for Hispanic workers, and rose 0.2 points to 24.0% for White workers. The real motion was among women, whose rate dropped 1.6 percentage points to 29.4% — an exact mirror image of July, when it jumped 1.6 points to 31.0%. The rate for men ticked up 0.1 points, to 19.6%. Whether the women’s number is recovery or statistical weather, the institute does not yet claim to know.

“One of the things we’ll be watching is where the improvement is occurring and whether it becomes more broadly shared,” Ludwig said. “The decline for women this month is encouraging, while the numbers changed relatively little across racial groups. A sustained improvement across workers would give us greater confidence in the direction of the labor market.”

In the meantime, the two unemployment rates for the same month now differ by more than twenty percentage points. That is not so much a statistical disagreement as a difference of opinion about what the word ‘employed’ is for — and only one of the two numbers has ever been asked about poverty wages.