# US functional unemployment trends

> Live situation record from CLSTR: https://clstr.news/situations/us-functional-unemployment-trends
> Updated: 2026-08-24T23:47:15.000Z. Sources: 6. Developments: 2.

Reports indicate a rise in “functional unemployment” in the United States, a metric that includes individuals seeking to enter the labor market and part-time workers earning less than $26,000 annually before taxes. 

Data from the Ludwig Institute for Shared Economic Prosperity (LISEP) suggests this rate reached 25% over a four-month period, coinciding with a decrease in labor force participation. While the official government unemployment rate was reported at 4.1%, analysts argue that the functional metric better reflects economic survival. 

Economic pressures have been exacerbated by inflation and wage trends. In July, consumer prices rose 3.4% year-over-year while wages increased by only 3.2%, leading to a loss of purchasing power. During the same period, employers reportedly eliminated 23,000 jobs.

## Timeline

### 2026-08-24: US functional unemployment reaches new high

A new analysis finds that nearly 25% of U.S. workers were functionally unemployed in July, highlighting a gap between official unemployment rates and actual economic stability.

3 sources. https://clstr.news/cluster/us-functional-unemployment-reaches-new-high

### 2026-08-22: US functional unemployment reaches 25% according to LISEP study

A study by the Ludwig Institute for Shared Economic Prosperity shows functional unemployment in the US has reached 25%, including part-time workers earning below the poverty threshold.

3 sources. https://clstr.news/cluster/us-functional-unemployment-reaches-25-according-to-lisep-study

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Cite as: US functional unemployment trends. CLSTR, https://clstr.news/situations/us-functional-unemployment-trends