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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 30 September 2025 F E A T U R E S T O R Y difference. It has real consequences. Ludwig argues that presenting a low un- employment rate makes political leaders complacent. If the figure is 4.2%, it is easy to claim success and move on. In this picture, one could declare that the economy is healthy, and that workers are thriving. If the reality is closer to 24%, then millions of people are being overlooked. Policy that rests on the official number may ignore the needs of households that cannot cover basic expenses. It may assume the labor market is working when it is not, which could then allow inequalities to deepen. Ludwig warns that such complacency can lead to poor decisions, and ultimately, hurt middle- and low-income Americans. Moore pointed out: "If we think about the headline unemployment rate and TRU… the TRU is a more stable measure of the structural health of the economy." According to Moore, that 24% figure is the share of folks who might have trouble making consistent payments to maintain a mortgage or rent. The Mirror of Statistics T he debate over TRU and the official unemployment rate reflects a deeper issue. Numbers are not neutral. They are mirrors that show particular reflections of reality. The BLS measure shows a workforce that appears strong and steady. LISEP's measure shows a workforce with deep cracks beneath the surface. Both are built on rules, and both are internally consistent, but they reflect different choices about what counts as work and what counts as security. "There's a lot of abdicating of re- sponsibility on the part of the govern- ment, and I think that's the sort of mind- set that leads us into risky situations that lead to bad behavior in financial markets," Moore warned. "And that's happened in the past a bunch of times, and we learned the lesson, and then we put regulations in place, and we decide that government should have oversight over certain things. And then time pass- es, and things are fine, and then people get risky again for whatever reason, and then they take risks and bad things happen. So, we end up in this cycle." The official rate provides continuity across decades, but it risks missing the distress of people in survival mode. The TRU shines a light on that distress, but it breaks with tradition and produces a figure that shocks by its scale. The tension between the two measures is not likely to disappear any time soon. A Warning Sign W hether one accepts the TRU or not, it is difficult to ignore the questions it raises. If nearly 25% of work- ers are functionally unemployed, that suggests weaknesses in the foundation of the economy, and that growth is not as inclusive as the headline numbers imply. It also suggests that millions of families are shut out of opportunities for stability and advancement. According to Ludwig, people who are classified as employed but living in tents, unable to save or even put food on the table, are not being counted properly. They are not participating in the American Dream, but instead, are simply surviving. If those realities are ig- nored, the economy may be more fragile than the official statistics reveal. Choi emphasized: "Our hypothesis, looking at wealth inequality between homeowners and renters, is that the gap has increased significantly in the past 10 years." Specifically, Choi pointed to how homeowners locked into low rates built wealth, while renters often had nothing left to save. Thus, the housing market is exacerbating inequality, which Choi claimed "is a huge problem moving forward." Choi pointed out that in home- ownership, rising insurance costs and property taxes vary by region, and in the rental market, rising home prices, inter- est rates, and rents are making owner- ship more out of reach, something that she sees as "a red flag" since "homeown- ership is still one of the critical tools to build wealth in this country." She noted another challenge, sharing fears backed by research that a lot of people are "traumatized by what happened during the Great Recession." Since then, banking has been overly regulated, making it difficult to expand credit. "It's more overly tight," she clarified. Moore, meanwhile, cautioned that TRU is "a much less sensitive recession indicator" than the official rate, since it reflects ongoing structural precarity rather than sudden shocks. He also flagged another looming issue: the student debt repayment situation. "I think people are realizing how big of a deal it is, month to month, as more people hit that threshold where the repayments have to start or they start impacting folks' credit. That is the sort of pullback in demand in the economy that starts that spiral that leads to a recession." A Blurred Bottom Line A s things currently stand, the BLS re- ports an unemployment rate of just over 4%. The Ludwig Institute reports a True Rate of Unemployment closer to 25%. Between those two numbers lies a gaping gulf of interpretation. One tells a story of stability, while the other tells a story of survival mode. The truth of the American labor market may depend on which mirror you choose to gaze into. One reflection flatters, while the other reveals cracks. Both are real in their own way. The challenge for policymakers, economists, and citizens is to decide which reflection will guide action. If the low official rate continues to dominate, complacency may persist. If the higher TRU gains recognition, the country may be forced to reckon with the hidden struggles of millions of its workers. The choice is not merely statistical, it is about whose experiences count, whose struggles are seen, and whether the numbers that shape public debate reflect the reality of people living on the edge of survival.