The US Unemployment Rate was 4.2% in September 2026, according to the jobs report released on 2 October. That is 7.1 million people out of work and looking for a job. This headline rate is called U-3. A broader measure, U-6, was 7.6%.
The Federal Reserve is asked to pursue two goals: maximum employment and stable prices. The Unemployment Rate is the main gauge of the first. Here is how it is measured, how U-3 and U-6 differ and where the rate stands against the Fed's goal.
What is the Unemployment Rate? The Unemployment Rate is the share of the labour force that has no job but is available for work and has looked for one in the past four weeks. The labour force is everyone working plus everyone looking for work.
The headline rate is called U-3. It was 4.2% in September 2026.
U-6 is broader. It adds people who want a job but have stopped looking. It also adds part-timers who want full-time work. It was 7.6%.
Fed officials estimate the rate the economy can sustain in the long run. Their median estimate is 4.2%, the same as the rate now.
How the Unemployment Rate is measured
The rate comes from the household survey in the monthly jobs report, run by the Census Bureau for the Bureau of Labor Statistics (BLS). About 60,000 households are asked who in the home worked, who looked for work and who did neither.
Each person aged 16 and over then lands in one of three groups:
Employed: did any paid work in the survey week, even one hour.
Unemployed: had no job, was available to work and looked for one in the past four weeks.
Not in the labour force: neither working nor looking. That includes retirees, students, carers and people who have stopped looking.
Source: US Bureau of Labor Statistics; YX Insights
In September 2026, the US had 275.6 million people aged 16 and over, outside the military and institutions such as prisons. Of those, 170.3 million were in the labour force. 163.2 million had a job and 7.1 million were looking for one.
The Unemployment Rate is 7.1 million divided by 170.3 million, or 4.2%. The 105.3 million outside the labour force do not count at all. That is why the rate can fall when people simply stop looking.
U-3 vs U-6
The BLS publishes six measures of unemployment, named U-1 to U-6. This guide covers the two below:
U-3 is the official rate described above.
U-6 adds two groups U-3 leaves out. One is marginally attached workers, who want a job and have looked in the past year, but not in the past four weeks. Those who have stopped looking because they think no job is available are part of this group. The other is people working part time who want full-time work but cannot find it.
Source: FRED (UNRATE, U6RATE); YX Insights
U-6 is always higher. Since 1994, it has run an average of 4.5 percentage points above U-3. In September 2026, the gap was 3.4 points, below that average. U-6 peaked at 22.9% in April 2020, when U-3 hit 14.8%. Its lowest since the pandemic was 6.6%, in December 2022.
The two usually move together. The gap between them widens when employers cut hours. Part-timers who want more work count in U-6. They do not count in U-3.
The Fed's maximum employment goal
By law, the Fed pursues maximum employment and stable prices. We explain this dual mandate in What Does the Fed Do?.
The Fed does not set a number for maximum employment. Its statement on longer-run goals says the level cannot be measured directly. It changes over time, mostly for reasons outside monetary policy. Instead, each Fed official gives an estimate of the Unemployment Rate the economy can sustain in the long run. In September 2026, the median of those estimates was 4.2%.
When the Fed met on 16 September, the latest rate was 4.1%, for August. That was just below the officials' estimate. The Fed raised interest rates that day, saying inflation remains elevated. The September figure then came in at 4.2%, in line with the estimate.
The September 2026 jobs report
The September 2026 figures, released on 2 October:
Unemployment Rate (U-3): 4.2%, up from 4.1% in August.
U-6: 7.6%, down from 7.7%.
Labour force participation: 61.8% of people aged 16 and over were working or looking for work, up from 61.6%.
Nonfarm Payrolls, from a separate survey of employers: up 29,000, with July and August revised down by 60,000. We cover them in What Are Nonfarm Payrolls?
U-3 rose while U-6 fell. So the extra groups in U-6 shrank: fewer people wanted more hours or had stopped looking. Participation also rose, so more people were in the labour force.
There is one gap in the record. No Unemployment Rate was published for October 2025, because the household survey was not run during the US government shutdown.
How to read the Unemployment Rate
A few points help:
Watch the trend, not one month. The BLS puts the margin of error on a monthly change at about 0.3 percentage points. So a 0.1-point move can be noise.
Read it with participation. A falling rate with falling participation is weaker than it looks.
Check U-6 too. It picks up part-timers who want more hours, which the headline rate leaves out.
The Unemployment Rate is the share of the labour force without a job and looking for one. U-6 adds people who have stopped looking, plus part-timers who want more hours. In September 2026, U-3 was 4.2% and U-6 was 7.6%. Read both with participation to judge how close the economy is to the Fed's employment goal.
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