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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 28 September 2025 F E A T U R E S T O R Y cess to produce estimates every month. Every month, BLS revises the prior two months' employment estimates to reflect slower-arriving, more-accurate informa- tion." After McEntarfer's dismissal, the BLS has since named William Wiatrowski Statistical Official, Acting Commissioner of Labor Statistics. LISEP's July True Rate of Unemploy- ment report increased 0.6 percentage points month-over-month, from 24.1% in June to 24.7% in July. In contrast the official rate of employment reported by the BLS increased just 0.1 percentage point to 4.2% in July 2025. The functional unemployment rate, according to LISEP, has now remained at 24% or higher for six consecutive months The gap between the two measures raises uncomfortable questions ... is the country truly at near full employment, or are millions of households living in survival mode and unable to reach even the first rung of what was once called the "American Dream?" Speaking of the American Dream: "You want a balance in jobs," said Edward J. Pinto, Senior Fellow and Co-Director of the AEI Housing Center at the American Enterprise Institute (AEI). "To get a balance in jobs, you have to have economic growth that's happen- ing in construction, in factory, in sales, in technology ... all of those things, not just in the low wage healthcare portion of the sector and the food, hospitality, etc., lodging, and in government employ- ment." What the Official Rate Shows T he unemployment rate most Americans hear about is the figure produced each month by the BLS. It is built on a simple set of rules. If you do not have a job, if you are available to work, and if you have looked for work within the last four weeks, then you are counted as unemployed. If you do not meet those criteria, then you are not included in that total. The BLS definition also classifies any- one who has worked at all as employed. If you picked up one hour of paid work last week, you are employed. If you worked part time while searching for full time, you are employed. If you are patching to- gether small bits of work, but do not have stability, you are still employed. If you gave up searching because you felt there were no jobs available, you do not appear in the official unemployment rate at all. By this measure, the unemploy- ment rate was steady at 4.2% in April, unchanged from March. In the same month, the official story was that employers were still hiring, even as tariffs and weak consumer confidence weighed on parts of the economy. For generations, that number has been the gold standard with policymakers, the financial markets, and the public inter- preting it as a briefing of whether or not the economy is expanding or faltering. What the True Rate Suggests G ene Ludwig, Chair of the Ludwig Institute, argues that the official un- employment data leaves out too much. He notes that the current system counts people as employed even when their circumstances are dire. In his words, you can be homeless, living in a tent community, and if you worked a single hour in the last two weeks, you will be classified as employed. That is the flaw in classifying those as "unemployed" that he wants to correct. The True Rate of Unemployment, or TRU, counts workers who are looking for work, but cannot find full time em- ployment. It also counts those who are working but do not earn above a poverty wage. By doing so, it incorporates a much wider view of the American work- force. It includes people who are left behind by the official statistics. The figure in April was 24.3%, up slightly from 24% the month prior. The rise occurred while the BLS rate remained unchanged. To Ludwig and his colleagues, that gap shows how misleading the official numbers can be. TRU has been published since 2020. It is built to track functionally unemployed workers, people who do not have steady jobs that provide a living wage. There's a lot of abdicating of responsibility on the part of the government, and I think that's the sort of mindset that leads us into risky situations that lead to bad behavior in financial markets." —Kyle K. Moore, Economist, Program on Race, Ethnicity, and the Economy at the Economic Policy Institute