This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
Key Points
- I am looking at both U-3 and U-6 household unemployment rates now.
- U-6 includes involuntary part-timers and those marginally attached to the labor force.
- This U-6 rate shows the ‘gig economy’ stress level, within this U.S. labor force.
- On both U-3 and U-6 measures, we are back to a 2017-era U.S. economy now.
- The probability of a FOMC rate hike in December 2026 has risen to 63%.
- The 4.53% yield on the 10-year Treasury, was up 6 basis points on June 5th, 2026, when the report came out. Breaking 4.5% is meaningful.
First, please click on this link. It sends you to the U.S. Bureau of Labor Statistic (BLS) “Employment Situation Summary” for June 5th, 2026.
Here are the opening lines, from this latest U.S. jobs report…
“Total nonfarm payroll employment increased by 172,000 in May, and the unemployment rate was unchanged at 4.3 percent, the U.S. Bureau of Labor Statistics reported today.”
“Job gains occurred in leisure and hospitality, local government, and health care. Employment in financial activities declined.”
Second, click on the hot link, to Schwab Network’s TV show “The Watch List.”
“Hiring Strength vs. Job Quality: Reading the Latest Labor Data”
I noted strong seasonal U.S. job additions, for this late Spring month of May.
- Leisure & Hospitality added +70K of those +172K May jobs
- Local Government added another +55K jobs
- Health Care added +35K jobs
- Social Assistance added +12K jobs
That is +162 of the +172K jobs. In percentage terms? 94% of the May 2026 total arrived from non-cyclical government, or heavily government-funded private sectors, or from seasonal Leisure & Hospitality hiring.
Third and finally, note this. Solid backward-looking late Winter/early Spring job revisions are in hand, too.
If you go to the bottom of the BLS summary, you can extract a revised ‘signal’ from the fresher monthly march of data revision ‘noise.’
Here is what the BLS wrote in May—
“The change in total nonfarm payroll employment for March was revised up by 29,000, from +185,000 to +214,000, and the change for April was revised up by 64,000, from +115,000 to +179,000. With these revisions, employment in March and April combined is 93,000 higher than previously reported.”
That may make you feel better about the underlying strength of the U.S. economy.
However, in the next two sections? I will raise your level of caution. I point out broader U.S. labor market stress.
I compute both the standard media-used ratio (known to economists as the U-3 household unemployment rate), and the U-6 measure.
U-6 is commonly referred to as the "under-employment rate" or the "real unemployment rate."
Which, in these cost-stressed, record profit-margin circumstances? Which companies are seeking to hold onto, fiercely? It certainly is … the “real unemployment rate."
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How to Use the Monthly BLS Jobs Report
This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
Key Points
First, please click on this link. It sends you to the U.S. Bureau of Labor Statistic (BLS) “Employment Situation Summary” for June 5th, 2026.
Here are the opening lines, from this latest U.S. jobs report…
“Total nonfarm payroll employment increased by 172,000 in May, and the unemployment rate was unchanged at 4.3 percent, the U.S. Bureau of Labor Statistics reported today.”
“Job gains occurred in leisure and hospitality, local government, and health care. Employment in financial activities declined.”
Second, click on the hot link, to Schwab Network’s TV show “The Watch List.”
“Hiring Strength vs. Job Quality: Reading the Latest Labor Data”
I noted strong seasonal U.S. job additions, for this late Spring month of May.
That is +162 of the +172K jobs. In percentage terms? 94% of the May 2026 total arrived from non-cyclical government, or heavily government-funded private sectors, or from seasonal Leisure & Hospitality hiring.
Third and finally, note this. Solid backward-looking late Winter/early Spring job revisions are in hand, too.
If you go to the bottom of the BLS summary, you can extract a revised ‘signal’ from the fresher monthly march of data revision ‘noise.’
Here is what the BLS wrote in May—
“The change in total nonfarm payroll employment for March was revised up by 29,000, from +185,000 to +214,000, and the change for April was revised up by 64,000, from +115,000 to +179,000. With these revisions, employment in March and April combined is 93,000 higher than previously reported.”
That may make you feel better about the underlying strength of the U.S. economy.
However, in the next two sections? I will raise your level of caution. I point out broader U.S. labor market stress.
I compute both the standard media-used ratio (known to economists as the U-3 household unemployment rate), and the U-6 measure.
U-6 is commonly referred to as the "under-employment rate" or the "real unemployment rate."
Which, in these cost-stressed, record profit-margin circumstances? Which companies are seeking to hold onto, fiercely? It certainly is … the “real unemployment rate."