Labor Market · Career Advice
The government says unemployment is low. LISEP says nearly one in four people in the labor force lack adequate work or earnings. We looked at what both numbers measure—and why the hiring data tells another part of the story.
Jump to a sectionSomeone on LinkedIn described spending a year and a half looking for work. They had a science degree and, after 18 months of applications, had managed just three interviews. They had even tried pharmaceutical plant jobs advertised as requiring no experience. At one plant, a connection handed their resume directly to the manager. They still got rejected, without an email explaining why.
If you've been looking for a job for months, you probably understand the frustration. You have qualifications. You apply to jobs that appear to match. Sometimes you even know someone inside the company. Still, nothing happens.
Now consider the numbers. In September 2026, the US Bureau of Labor Statistics (BLS) reported 4.2% unemployment. But the Ludwig Institute for Shared Economic Prosperity (LISEP) reported 24.0% functional unemployment for the same month.
That's nearly six times as high. Many suggested the government was hiding the real situation. But is the unemployment rate fake, or are the two figures answering different questions? And what do they tell us about why finding a job is so hard in 2026?
We compared the methods behind both figures with government hiring data and research from recruiting platforms. The interesting part isn't deciding which number wins. It's understanding what each one misses.
|
4.2%
Official BLS unemployment rate
(U-3, Sept. 2026) |
vs. |
24.0%
LISEP functional unemployment rate
(TRU, Sept. 2026) |
Having a job and having enough work or income are two different things.
Let's start with a detail many people don't know: if you work even one hour for pay during the BLS survey reference week, you're counted as employed.
Imagine two people.
Jim works 40 hours a week as a marketing executive, earns $85,000 a year, and has a stable job. Mary wants full-time work but has only managed to earn $50 babysitting one day that week.
In the headline BLS unemployment measure, both are employed.
That doesn't mean their situations are considered equally good. It means the headline number answers a narrow question: Who has a job, and who is jobless, available, and actively searching? It isn't designed to tell us whether a job provides enough hours or enough income.
And there is another common misunderstanding. When the unemployment rate is 4.2%, it doesn't mean 95.8% of all Americans have jobs. The percentage is calculated from the labor force: people working plus those who meet the official definition of unemployed. Someone who isn't working and has stopped actively searching generally isn't counted as unemployed, even if they'd like a job.
The BLS doesn't hide the fact that its headline measure has limits. It publishes several broader measures, including U-6, which counts officially unemployed people, certain people who want work but aren't currently searching, and people working part-time for economic reasons. In September 2026, U-6 stood at 7.6%.
So we already have two government numbers: 4.2% (U-3) and 7.6% (U-6). Then LISEP comes in with 24%.
LISEP isn't interviewing a completely separate set of American workers. Its True Rate of Unemployment (TRU) uses federal labor-market data but applies a different definition of adequate employment.
Under LISEP's approach, someone can be functionally unemployed if they have no job, are working fewer than 35 hours while wanting full-time work, or earn below $26,000 a year before taxes, measured in 2025 dollars, even if they're working full-time.
Go back to Mary. She worked one day and wants full-time employment. The BLS counts her as employed; LISEP would count her as functionally unemployed.
Now add David. He works 40 hours a week but earns $24,000 before taxes. He's employed by the BLS definition, but functionally unemployed under LISEP's earnings threshold.
The distinction is simple. Mary needs more working hours. David needs better pay. Someone who's completely jobless needs work. LISEP groups all three situations together because none meets its definition of adequate employment.
That's what 24.0% functional unemployment in September 2026 means: roughly one in four people in the labor force met LISEP's broader definition. It doesn't mean one in four Americans has no job, and it doesn't mean all of them are applying for another job.
There is a limitation, too. A $26,000 income threshold won't buy the same standard of living in a small town and New York City. If LISEP set a different threshold, its figure would change. But the measure surfaces something the headline unemployment rate cannot: having a job and having enough work or income are two different things.
That is also the main difference between U-6 vs. functional unemployment. U-6 captures some hidden labor underutilization; it doesn't automatically count a full-time worker earning below $26,000 as underutilized. LISEP does.
Both can be accurate under their own definitions. Calling 24% the real unemployment rate and 4.2% fake makes for a dramatic headline, but it skips an important part of the research.
LISEP's figure combines people who are out of work with people who have jobs that don't provide adequate hours or earnings. Those are related problems, not identical ones. A person who has no income needs something different from a full-time worker who needs higher pay.
This is part of the debate about LISEP's methodology. Labor economist David Card has questioned how helpful it is to combine different forms of labor-market difficulty into one index, noting that BLS already publishes alternative underutilization measures.
We also noticed something interesting in the monthly figures. LISEP's TRU fell from 24.9% in July 2026 to 24.0% in September. Over that same period, official U-3 unemployment edged up from 4.1% to 4.2%.
How could one improve while the other worsened?
Imagine Mary finally gets full-time work that pays above LISEP's threshold. She was already counted as employed by BLS, so her improvement doesn't directly lower U-3. But it can lower functional unemployment. Now imagine somebody else loses a job and starts searching; that can increase official unemployment.
These examples don't establish what caused those particular monthly changes. They show why BLS unemployment rate vs. LISEP isn't a contest between two attempts to count exactly the same thing.
Here's what we think the comparison really reveals: the headline unemployment rate is a measure of joblessness, not a report card on the quality of every job.
But it leaves a second question unanswered. Even if many workers need better employment, why are qualified applicants struggling to get interviews? For that, we need to examine actual hiring.
The BLS reported 7.5 million US job openings in September 2026, alongside about 5.4 million hires during the month. That sounds like a busy market. So why is it so hard to get a job?
First, these figures aren't two steps in the same hiring funnel. Openings are measured at month-end; hires happen throughout the month. We can't subtract one from the other and call the difference jobs employers refused to fill.
The more useful comparison is how quickly people are moving into jobs. The monthly hiring rate was 3.4% in September 2026, down from 4.4% in September 2021. The rate at which employees voluntarily quit also fell, from 3.0% to 2.1%. The post-pandemic market of 2021 was unusually active, so it isn't a perfect baseline. But the change helps explain the term low-hire, low-fire labor market.
Think about someone in a stable job who decides not to leave because they're unsure they'll find another. That's one less vacancy their employer needs to fill. When fewer people move, fewer opportunities open up for those trying to enter or change jobs. It doesn't mean hiring has stopped. It means the market isn't moving as freely.
Now look at application volume. Ashby analyzed 109 million applications across 247,000 jobs and found that employers were processing around 291 applications per hire in early 2026, versus roughly 100 in early 2021.
That's almost three times as many applications for each hiring outcome in Ashby's dataset—not 291 applications for every vacancy everywhere.
Imagine reviewing 100 resumes for one hire, then having to work through nearly 300 for a similar result. Even capable applicants can struggle to make the shortlist, especially when the employer has strict requirements or the role has changed since it was posted.
Ashby also found that candidates who reached the interview stage converted to offers at higher rates than in 2021. That suggests getting to an interview can be one of the biggest barriers, though the experience varies across companies and roles.
So “I've applied to 100 jobs and received no interviews” doesn't automatically mean the person lacks the skills. The application may be poorly matched, the opening may be slow-moving, or the candidate may simply not have made a very crowded shortlist.
Then there are ghost jobs. Greenhouse found that 18–22% of jobs posted on its platform in a given quarter were classified as ghost jobs—postings without a genuine intention to hire. That's not an estimate for all US jobs, and an old posting isn't necessarily fake. Some positions are paused, some are for ongoing talent pipelines, and some change after the employer advertises them. But from a candidate's side, they can look the same: an application goes in, no reply comes back, and the vacancy stays online.
This is the missing piece between the unemployment figures and the lived experience of getting rejected from jobs in 2026. The rates tell us who has work or adequate earnings. Hiring activity and recruiting data tell us why getting the next job may be difficult.
Remember the science graduate who applied for a no-experience pharmaceutical job and still got rejected after a direct referral? A degree and a connection both help, but neither removes the employer's selection process.
LISEP reported 29.3% functional unemployment among workers with a high school diploma, 16.8% among bachelor's degree holders, and 13.4% among people with advanced degrees in September 2026.
Education is associated with better outcomes. But roughly one in six bachelor's degree holders still met LISEP's definition of functional unemployment. Remember, that includes inadequate hours or earnings, not just having no job.
The New York Fed found a different problem among recent graduates: 5.2% unemployment and 42.5% underemployment in the third quarter of 2026. Here, underemployment means having a job that typically doesn't require a college degree—not LISEP's income-based definition. A science graduate working in retail could be employed under BLS and underemployed under the New York Fed's measure.
And “no experience required” doesn't mean there are no other requirements. A pharmaceutical plant may still need someone who can work rotating shifts, follow safety procedures, and train for regulated production work. Two applicants can qualify on paper but fit those working conditions differently. We don't know why the LinkedIn applicant was rejected, and shouldn't pretend we do.
Ashby analyzed 38 million applications across 93,000 jobs from 2021 to 2024. 40% of referred candidates reached an interview, compared with 3% of inbound applicants.
That's a big advantage. But read the same statistic another way: about 60% of referred candidates still didn't reach an interview.
It also matters what the referral actually says. Someone forwarding your resume isn't the same as a colleague who can explain how you worked together and why you're a match. Employers may still use an applicant tracking system (ATS), screening questions, and a hiring-manager shortlist. A referral isn't a way to bypass every requirement.
So if you're asking “Why didn't my referral work?”, consider whether it showed why you matched that particular role. A referral helps get attention. It isn't an offer or an automatic interview.
Here's the encouraging part: employers don't hire only from public applications. Gem found that job boards and company marketing channels produced roughly 90% of applications but only about half of hires. So applying online still matters, but it shouldn't be your only approach.
Yes. Recruiters also search for people whose backgrounds fit an opening. For a science graduate, “looking for work” says much less than a profile showing actual laboratory skills, safety training, equipment experience, location, and shift availability. The idea isn't to stuff your resume with keywords or bypass ATS filters. It's to help a recruiter understand what work you can do.
One finding from Gem stood out: 46% of sourced hires came from candidates already in an employer's recruiting database, up from 26% in 2021. That's 46% of sourced hires, not all hires.
Imagine applying for a business analyst role, reaching the shortlist, and losing out to another candidate. A few months later, the same employer needs similar skills. Its recruiter may revisit previous applicants before searching from scratch. That's candidate rediscovery.
After a rejection, stay in touch with relevant recruiters, update your experience, and express interest in similar positions. An old application may still matter.
The American Staffing Association (ASA) and LinkedIn found that the share of contract job postings increased by 7% in 2025, after increases of 24% in 2023 and 10% in 2024. These are changes in the share of postings, not the total number of contract jobs. ASA also reported 9.5 million people employed through temporary and contract staffing during 2025.
A healthcare company needing an IT specialist for an eight-month project may hire a contractor rather than create a permanent role. Someone searching only for direct-hire jobs could miss it.
Contract work is another route, not a guaranteed permanent job. If something is advertised as contract-to-hire, ask whether conversion is planned or only possible, and check the assignment's duration, pay, benefits, and end conditions. ASA–LinkedIn research found that contract-to-permanent transitions were less common in 2025 than in 2016.
At nTech Workforce, we recruit for contract, contract-to-hire, and direct-hire opportunities across technology, healthcare, engineering, government, and professional services. You can explore opportunities and register your resume for relevant openings.
Before sending another hundred applications, look at where your search is failing. Are the roles a genuine match for your skills, location, and shift availability? Are you relying only on job boards? Have you spoken to recruiters who work in your field or followed up with employers who considered you previously?
And when you can speak to a recruiter, ask: “Is this an active, approved position you're interviewing for now, or are you collecting candidates for future openings?”
That won't guarantee a job. But it helps focus your search on real hiring needs. The science graduate's degree and referral still have value. The next step is finding where that experience genuinely fits.
It's accurate for what it measures: joblessness among people who are actively searching for work. It isn't designed to show whether a job provides enough hours or income. The BLS's 4.2% and LISEP's 24.0% functional-unemployment figure can both be correct at once — they're answering different questions, not competing to count the same thing.
The BLS's headline rate (U-3) counts only people with no job who are actively searching for one. LISEP's True Rate of Unemployment also counts people working fewer than 35 hours while wanting full-time work, and full-time workers earning below roughly $26,000 a year.
It helps, but it doesn't guarantee adequate work. LISEP reported 16.8% functional unemployment among bachelor's degree holders in September 2026, compared with 29.3% among workers with only a high school diploma.
No. Referred candidates reach the interview stage far more often than cold applicants (40% versus 3%), but about 60% of referred candidates still don't get an interview. A referral helps you get noticed — it isn't an offer.
Employers are now processing roughly three times as many applications per hire as they were in 2021. The volume of competition has gone up sharply, so a string of rejections often reflects that crowding rather than a gap in your qualifications.
Not necessarily. Dropping a prior-experience requirement doesn't remove other requirements — shift availability, safety training, or specific working conditions can still rule candidates in or out.
Postings without a genuine, active intent to hire. On Greenhouse's platform, an estimated 18–22% of postings in a given quarter fit this pattern — though some are paused roles or ongoing talent pipelines rather than outright fake listings.
Check that the roles genuinely match your skills, location, and availability. Don't rely only on job boards — they produce most applications but only about half of hires. Reconnect with recruiters you've spoken to before, and ask directly whether a role is an active search or a future pipeline.
Yes. nTech Workforce recruits for contract, contract-to-hire, and direct-hire roles across technology, healthcare, engineering, government, and professional services. You can explore current openings and register your resume on the nTech Workforce site.