Monday, May 18, 2026
There hasn’t been much job growth. So, why has the unemployment rate not gone up?
Well, the conventional wisdom said we needed about 125,000 new jobs per month to keep up with population growth. If we created more jobs, unemployment would follow and vice versa.
But data shows job growth has flatlined. Historically, that would mean at least a 1% rise in the unemployment rate. If our current unemployment rate of 4.3% was near 5.3%, it would cause big problems.
When examining the employment-to-population ratio, it’s flatlined in recent years. A substantial part of that can be tied to the baby boomer generation retiring.
But the flatlining extends into workers aged 24 to 54. So, you’d expect an increase in the unemployment rate. However, it hasn’t moved.
The reason the unemployment number hasn’t moved is because there have been almost 500,000 illegal immigrants deported and another almost 2 million left voluntarily.
So, almost 2.5 million people total are gone. Some were not of working age, but many of them were in the workforce and the population figures. Of the roughly 170 million workers in the U.S., roughly 1% of that number left and it didn’t move the needle.
That’s why unemployment is not going up. But the issue of not creating jobs remains.
Daniel A. White is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Daniel A. White & Associates and CoreCap Advisors are separate and unaffiliated entities.