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Article
June 2022

U.S. labor market shows improvement in 2021, but the COVID-19 pandemic continues to weigh on the economy

The U.S. labor market continued to recover in 2021 from the recession caused by the coronavirus disease 2019 pandemic. Both the number of people who were unemployed and the unemployment rate decreased over the year. Although both measures are still above their prepandemic levels, the number of unemployed fell by 4.1 million over the year, to 6.8 million, and the unemployment rate decreased by 2.6 percentage points, averaging 4.2 percent in the fourth quarter of 2021. The employment–population ratio increased by 1.8 percentage points, to 59.2 percent, while the labor force participation rate showed more modest improvement, increasing by 0.3 percentage point during the year, to 61.8 percent in the fourth quarter. The numbers of unemployed on temporary layoff and those unemployed for 27 weeks or longer decreased over the year, but both measures are still above their prepandemic levels. The number of people working part time for economic reasons returned to its prepandemic level, and the number of self-employed increased by 7.8 percent in 2021.

The recession induced by the coronavirus disease 2019 (COVID-19) pandemic resulted in steep job losses, pushed the unemployment rate to a high of 13.0 percent in the second quarter of 2020, and caused many people to leave the labor force.1 By the end of 2021, even after substantial strides were made in combating the COVID-19 pandemic, the labor market still had not fully recovered.2 The jobless rate continued to trend downward, and by the fourth quarter of 2021, it was 4.2 percent, 2.6 percentage points below the rate from the prior year.3 The number of unemployed, at 6.8 million in the fourth quarter of 2021, decreased by 4.1 million over the year.4

Total employment, as measured by the Current Population Survey (CPS), rose by 5.4 million over the year, to 155.2 million, which was well below its prepandemic level of 158.5 million in the fourth quarter of 2019.5 The employment–population ratio increased by 1.8 percentage points, to 59.2 percent. The labor force participation rate (the percentage of the population ages 16 years and older who are either employed or actively seeking employment) rose by 0.3 percentage point over the year, to 61.8 percent.

This article highlights a broad range of economic indicators from the CPS to provide a picture of labor market performance in 2021, both overall and for various demographic groups. The article also summarizes the number of people who, because of the COVID-19 pandemic, teleworked, were unable to work or worked reduced hours, or were prevented from looking for work. These data were collected through supplemental questions that were added to the CPS in the early stages of the pandemic. This article also provides 2021 updates on the trends in usual weekly earnings, labor force status flows, and the number of self-employed people and summarizes recent changes in the employment situations of veterans, people with a disability, and the foreign born.

Both the number of unemployed and the unemployment rate declined for all major demographic groups, but both measures remained above their prepandemic levels

The number of unemployed people was 6.8 million in the fourth quarter of 2021, a decrease of 4.1 million from a year earlier. Despite the large decline in 2021, however, the total number of unemployed was still 908,000 more than it was in the fourth quarter of 2019, before the pandemic began. The unemployment rate also declined in 2021. (See table 1.) The unemployment rate averaged 4.2 percent in the fourth quarter of 2021, which is 2.6 percentage points below the rate in the fourth quarter of 2020. Even with this improvement, the unemployment rate remained above the rate of 3.6 percent in the fourth quarter of 2019. (See chart 1.)

Table 1. Employment status of the civilian noninstitutional population 16 years and older, by gender, race, and Hispanic or Latino ethnicity, quarterly averages, seasonally adjusted, 2020–21 (levels in thousands)
CharacteristicsFourth quarter 20202021Change, fourth quarter 2020–21
First quarterSecond quarterThird quarterFourth quarter

Total, 16 years and older

Civilian labor force

160,681160,391160,964161,451162,0101,329

Participation rate

61.561.561.661.761.80.3

Employed

149,788150,437151,474153,226155,1785,390

Employment–population ratio

57.457.758.058.659.21.8

Unemployed

10,8949,9549,4918,2256,832-4,062

Unemployment rate

6.86.25.95.14.2-2.6

Men, 16 years and older

Civilian labor force

85,28585,10885,38985,65485,870585

Participation rate

67.567.467.667.767.70.2

Employed

79,39179,73880,18881,12882,2582,867

Employment–population ratio

62.963.263.564.164.92.0

Unemployed

5,8945,3705,2004,5263,611-2,283

Unemployment rate

6.96.36.15.34.2-2.7

Women, 16 years and older

Civilian labor force

75,39675,28375,57575,79676,140744

Participation rate

55.955.956.056.156.30.4

Employed

70,39770,69871,28572,09872,9192,522

Employment–population ratio

52.252.552.953.453.91.7

Unemployed

4,9994,5854,2903,6993,221-1,778

Unemployment rate

6.66.15.74.94.2-2.4

White

Civilian labor force

124,316123,832123,938124,235124,579263

Participation rate

61.661.461.461.561.60.0

Employed

116,835116,982117,487118,624120,0703,235

Employment–population ratio

57.958.058.258.759.41.5

Unemployed

7,4816,8506,4515,6114,509-2,972

Unemployment rate

6.05.55.24.53.6-2.4

Black or African American

Civilian labor force

20,14920,23220,56820,57920,516367

Participation rate

60.260.461.361.260.80.6

Employed

18,04318,31118,64618,88719,0541,011

Employment–population ratio

53.954.655.556.156.52.6

Unemployed

2,1061,9201,9211,6921,462-644

Unemployment rate

10.59.59.38.27.1-3.4

Asian

Civilian labor force

10,34510,35310,42310,63810,763418

Participation rate

62.562.763.264.365.12.6

Employed

9,6389,7479,83610,14710,333695

Employment–population ratio

58.259.059.661.462.54.3

Unemployed

707607587491430-277

Unemployment rate

6.85.95.64.64.0-2.8

Hispanic or Latino ethnicity

Civilian labor force

29,15529,08729,20729,51129,842687

Participation rate

65.465.265.265.666.00.6

Employed

26,54126,70427,06127,67228,2741,733

Employment–population ratio

59.659.960.461.562.52.9

Unemployed

2,6132,3832,1461,8391,568-1,045

Unemployment rate

9.08.27.36.25.3-3.7

Note: Estimates for the race groups (White, Black or African American, and Asian) do not sum to totals because data are not presented for all races. People whose ethnicity is identified as Hispanic or Latino may be of any race. Updated population controls are introduced annually with the release of January data.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

Unemployment declined among both men and women in 2021. The jobless rate for men fell by 2.7 percentage points over the year, to 4.2 percent in the fourth quarter, and by 2.4 percentage points for women, to 4.2 percent. Although the unemployment rates for men and women declined in 2021, they remained above their prepandemic levels, when the rates for both men and women were 3.6 percent in the fourth quarter of 2019. (See table 1.)

Unemployment rates declined over the year for all demographic groups

The unemployment rates for all race and ethnicity groups declined in 2021, with the rate for Hispanics showing the largest over-the-year decrease. The jobless rate for Hispanics fell by 3.7 percentage points, to 5.3 percent, and the rate for Blacks fell by 3.4 percentage points, to 7.1 percent. The jobless rate for Asians declined by 2.8 percentage points, to 4.0 percent, and the rate for Whites fell by 2.4 percentage points, to 3.6 percent. Even with these improvements, the unemployment rates for Blacks and Hispanics remained considerably higher than the rates for Asians and Whites. Despite substantial improvements in 2021, particularly in the second half of the year, they were not enough to make up for the steep increases that occurred in the second quarter of 2020, when the rates for Whites, Asians, and Hispanics reached historic highs. (See chart 2.)

Jobless rates for younger workers declined more than the rates for older workers

The unemployment rate for 16- to 24-year-olds decreased by 3.6 percentage points over the year, to 8.4 percent in the fourth quarter of 2021. Within this age group, the jobless rate for teenagers (ages 16 to 19) fell by 3.3 percentage points over the year, to 11.2 percent in the fourth quarter of 2021. The rate for teenagers was well below its high of 28.4 percent in the second quarter of 2020 and lower than it had been before the pandemic (12.3 percent in the fourth quarter of 2019). The jobless rate for people ages 20 to 24 declined by 3.8 percentage points in 2021, to 7.2 percent, down from its high of 22.6 percent in the second quarter of 2020 but slightly above its prepandemic rate. Although unemployment rates rose sharply at the onset of the pandemic for all age groups, the increase was greatest among younger workers. A reverse pattern occurred in 2021, when younger workers experienced larger decreases in their jobless rates than did older workers. (See table 2.)

After hitting double digits (11.3 percent) in the second quarter of 2020, the unemployment rate for people in the prime working ages of 25 to 54 averaged 3.8 percent in the fourth quarter of 2021. This represents a decline of 2.4 percentage points over the year. The unemployment rates for both men and women of prime working age declined over the year, although these measures are still above the rates seen in the fourth quarter of 2019.

Table 2. Employment status of the civilian noninstitutional population 16 years and older, by age and gender, quarterly averages, seasonally adjusted, 2020–21 (levels in thousands)
CharacteristicsFourth quarter 20202021Change, fourth quarter 2020–21
First quarterSecond quarterThird quarterFourth quarter

Total, 16 to 24 years

Civilian labor force

20,70420,61520,67220,60520,847143

Participation rate

55.355.255.555.356.00.7

Employed

18,21818,33618,57818,67519,103885

Employment–population ratio

48.649.149.850.151.32.7

Unemployed

2,4862,2782,0931,9301,743-743

Unemployment rate

12.011.110.19.48.4-3.6

Total, 16 to 19 years

Civilian labor force

5,9425,9485,9915,9485,96624

Participation rate

35.936.136.436.236.30.4

Employed

5,0805,1315,3425,2865,300220

Employment–population ratio

30.731.232.532.132.21.5

Unemployed

862817649662667-195

Unemployment rate

14.513.710.811.111.2-3.3

Total, 20 to 24 years

Civilian labor force

14,76114,66714,68114,65714,881120

Participation rate

70.570.370.570.571.71.2

Employed

13,13713,20513,23613,38913,804667

Employment–population ratio

62.863.363.564.466.53.7

Unemployed

1,6241,4621,4451,2681,077-547

Unemployment rate

11.010.09.88.77.2-3.8

Total, 25 to 54 years

Civilian labor force

102,211102,366102,751103,110103,2171,006

Participation rate

81.081.281.581.881.80.8

Employed

95,92496,59797,23098,32699,3103,386

Employment–population ratio

76.176.677.178.078.72.6

Unemployed

6,2865,7695,5224,7843,907-2,379

Unemployment rate

6.25.65.44.63.8-2.4

Men, 25 to 54 years

Civilian labor force

54,50654,54454,78154,98854,933427

Participation rate

87.587.688.088.388.10.6

Employed

51,09051,48251,74552,35352,8681,778

Employment–population ratio

82.082.783.184.084.82.8

Unemployed

3,4163,0623,0362,6342,065-1,351

Unemployment rate

6.35.65.54.83.8-2.5

Women, 25 to 54 years

Civilian labor force

47,70447,82247,97048,12248,285581

Participation rate

74.775.075.275.475.71.0

Employed

44,83445,11545,48545,97346,4421,608

Employment–population ratio

70.270.771.372.172.82.6

Unemployed

2,8702,7072,4852,1491,842-1,028

Unemployment rate

6.05.75.24.53.8-2.2

Total, 55 years and older

Civilian labor force

37,73737,32337,54437,81637,914177

Participation rate

38.738.338.438.538.4-0.3

Employed

35,54535,43835,71336,33336,6741,129

Employment–population ratio

36.536.336.537.037.20.7

Unemployed

2,1921,8851,8311,4831,240-952

Unemployment rate

5.85.14.93.93.3-2.5

Men, 55 years and older

Civilian labor force

20,16519,97720,07220,21820,22156

Participation rate

44.644.244.244.444.2-0.4

Employed

19,02718,93919,09319,41519,605578

Employment–population ratio

42.141.942.142.642.80.7

Unemployed

1,1381,038979804617-521

Unemployment rate

5.65.24.94.03.0-2.6

Women, 55 years and older

Civilian labor force

17,56017,36517,48617,58017,678118

Participation rate

33.633.233.333.433.4-0.2

Employed

16,51816,49916,62016,91817,069551

Employment–population ratio

31.631.531.732.132.30.7

Unemployed

1,042866866662609-433

Unemployment rate

5.95.05.03.83.4-2.5

Note: Updated population controls are introduced annually with the release of January data.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

Among workers ages 55 years and older, the unemployment rate was 3.3 percent in the fourth quarter of 2021, down by 2.5 percentage points over the year. The jobless rates for men and women in this age group had similar over-the-year declines: 2.6 percentage points for men and 2.5 percentage points for women. The rates for both groups remained above the levels seen in the fourth quarter of 2019.

Jobless rates declined for people of all education levels

Among workers ages 25 years and older, jobless rates across all education levels declined in 2021, although they remained higher than they were in the fourth quarter of 2019, before the pandemic. The unemployment rate for people with less than a high school diploma declined by 3.7 percentage points in 2021, to 6.0 percent in the fourth quarter, the steepest drop among the educational attainment categories. Still, the jobless rate for this group remained 0.5 percentage point higher than its rate in the fourth quarter of 2019, when it was 5.5 percent. The rate for high school graduates with no college fell by 3.0 percentage points over the year, to 5.0 percent by the end of 2021. The jobless rate for people with some college or an associate’s degree, at 3.9 percent, decreased by 2.6 percentage points over the year. The jobless rate for people with a bachelor’s degree and higher, at 2.2 percent in the fourth quarter of 2021, was 1.9 percentage points lower than it was a year earlier and 0.2 percentage point higher than it was in the fourth quarter of 2019. The rates for both those with less than a high school diploma and those with a bachelor’s degree and higher have nearly returned to their prepandemic levels. As in the past, jobless rates in 2021 were much lower for people with higher levels of education than for those with less education. (See chart 3 and table 3.)

Table 3. Employment status of the civilian noninstitutional population 25 years and older, by educational attainment, quarterly averages, seasonally adjusted, 2020–21 (levels in thousands)
CharacteristicsFourth quarter 20202021Change, fourth quarter 2020–21
First quarterSecond quarterThird quarterFourth quarter

Less than a high school diploma

Civilian labor force

9,2089,0268,9709,1888,843-365

Participation rate

45.645.143.646.045.5-0.1

Employed

8,3168,2058,1148,4268,309-7

Employment–population ratio

41.241.039.542.142.71.5

Unemployed

893822857763534-359

Unemployment rate

9.79.19.68.36.0-3.7

High school graduates, no college[1]

Civilian labor force

35,15634,36034,92635,14335,518362

Participation rate

55.554.855.755.455.50.0

Employed

32,33831,97032,51133,06133,7331,395

Employment–population ratio

51.051.051.852.152.71.7

Unemployed

2,8182,3902,4152,0821,786-1,032

Unemployment rate

8.07.06.95.95.0-3.0

Some college or associate’s degree

Civilian labor force

35,77035,58735,89235,80535,430-340

Participation rate

62.562.863.363.162.70.2

Employed

33,43033,46933,78334,10734,057627

Employment–population ratio

58.559.159.560.160.31.8

Unemployed

2,3412,1182,1101,6991,372-969

Unemployment rate

6.56.05.94.73.9-2.6

Bachelor’s degree and higher[2]

Civilian labor force

59,70260,69060,64160,83561,1341,432

Participation rate

72.072.072.372.372.10.1

Employed

57,26558,35358,60359,14159,7582,493

Employment–population ratio

69.169.369.970.270.41.3

Unemployed

2,4372,3372,0381,6941,375-1,062

Unemployment rate

4.13.93.42.82.2-1.9

[1] This category includes people with a high school diploma or equivalent.

[2] This category includes people with bachelor’s, master’s, professional, and doctoral degrees.

Note: Updated population controls are introduced annually with the release of January data.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

About 1 in 3 unemployed people had been jobless for 27 weeks or longer

As unemployment surged following the onset of the COVID-19 pandemic, there was an increase in the number of people who were newly unemployed—that is, those unemployed for less than 5 weeks—but that number began to decrease as people either returned to work, stopped looking, or moved into the longer duration categories.6 In 2021, the number of short-term unemployed decreased by 615,000, or 23.5 percent, to 2.0 million in the fourth quarter. This group accounted for 29.5 percent of the total number of unemployed in the fourth quarter of 2021. (See table 4.)

Table 4. Unemployed people, by reason and duration of unemployment, quarterly averages, seasonally adjusted, 2020–21 (levels in thousands)
CharacteristicsFourth quarter 20202021Change, fourth quarter 2020–21
First quarterSecond quarterThird quarterFourth quarter

Reason for unemployment

Job losers and people who completed temporary jobs

7,5176,6115,9404,4503,388-4,129

On temporary layoff

3,0402,3511,9031,167909-2,131

Not on temporary layoff

4,4774,2604,0373,2832,478-1,999

Permanent job losers

3,6003,4713,2622,5531,903-1,697

People who completed temporary jobs

877789775730575-302

Job leavers

73670984985080266

Reentrants

2,0882,1282,1972,3362,13345

New entrants

532541540491501-31

Percent distribution

Job losers and people who completed temporary jobs

69.166.262.454.849.7-19.4

On temporary layoff

28.023.520.014.413.3-14.7

Not on temporary layoff

41.242.642.440.436.3-4.9

Job leavers

6.87.18.910.511.85.0

Reentrants

19.221.323.128.831.312.1

New entrants

4.95.45.76.07.32.4

Duration of unemployment

Less than 5 weeks

2,6192,2482,1152,1942,004-615

5 to 14 weeks

2,3752,2302,1271,8161,717-658

15 weeks or longer

5,8545,4985,2184,2263,064-2,790

15 to 26 weeks

2,0301,3641,2431,166884-1,146

27 weeks or longer

3,8244,1343,9753,0602,180-1,644

Average (mean) duration in weeks

23.127.829.829.028.25.1

Median duration, in weeks

18.917.719.414.113.1-5.8

Percent distribution

Less than 5 weeks

24.122.522.426.629.55.4

5 to 14 weeks

21.922.422.522.025.33.4

15 weeks or longer

54.055.155.251.345.2-8.8

15 to 26 weeks

18.713.713.114.213.0-5.7

27 weeks or longer

35.241.442.037.232.1-3.1

Note: Updated population controls are introduced annually with the release of January data.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

The number of long-term unemployed (people who were jobless for 27 weeks or longer) had been declining for about a decade prior to the onset of the pandemic. This measure rose to 4.1 million in the first quarter of 2021 but declined to 2.2 million by the end of the year. The number of long-term unemployed declined by 43.0 percent over the year. This group accounted for 32.1 percent of the total unemployed in the fourth quarter of 2021, down from 35.2 percent in the fourth quarter of 2020.7 Both measures, the number of long-term unemployed and their share of total unemployment, remained well above the levels seen before the pandemic.8 (See chart 4.)

After reaching a record high of 4.5 million (not seasonally adjusted) in the second quarter of 2010, the number of people unemployed for a year or longer (those jobless for 52 weeks or more) declined for nearly a decade. At the time of the surge in unemployment in the second quarter of 2020, the number of people unemployed for 52 weeks or longer, at 556,000, was the lowest level it had been since 2003. The initial surge in unemployment continued to move through the longer duration categories for the remainder of 2020 and into 2021. Those unemployed for 52 weeks or more rose to 2.7 million in the second quarter of 2021, before declining to 1.5 million in the fourth quarter of 2021. Their share of total unemployment spiked to 29.3 percent in the second quarter of 2021, before falling to 23.3 percent in the fourth quarter of 2021.

Number of people unemployed because they lost their job continued to decline

Unemployed people are grouped by their reasons for unemployment. People are unemployed because they either (1) were on temporary layoff, permanently lost their job, or completed a temporary job (referred to as job losers); (2) voluntarily left their job (job leavers); (3) reentered the labor force (reentrants); or (4) entered the labor force for the first time (new entrants).

The number of job losers and those who completed temporary jobs rose to an unprecedented level during the COVID-19 pandemic, to 17.7 million in the second quarter of 2020. (This was the highest quarterly average in the history of the data series, which began in 1967.) This number declined during the remainder of 2020 and through 2021. The number of job losers averaged 3.4 million in the fourth quarter of 2021. Virtually all of the increase in the number of job losers in the second quarter of 2020 consisted of people on temporary layoff.9 However, the composition of unemployed job losers shifted to people not on temporary layoff in 2021. The number of unemployed people not on temporary layoff, which is made up mostly of permanent job losers, was 2.5 million at the end of 2021, accounting for 36.3 percent of the total unemployed. This represented an increase of 21.5 percentage points from the second quarter of 2020.

Among those unemployed who were not on temporary layoff, the number of people who permanently lost their jobs, at 1.9 million, decreased by 1.7 million over the year, but the number remained above its prepandemic level. (See table 4 and chart 5.)

The number of unemployed reentrants to the labor force, at 2.1 million in the fourth quarter of 2021, changed little over the year. Reentrants are people who had been in the labor force previously, had spent time out of the labor force, and were actively seeking work once again. Reentrants accounted for 31.3 percent of unemployed people at the end of 2021.10

The number of unemployed job leavers—that is, people who voluntarily left their jobs—changed little over the year, averaging 802,000 in the fourth quarter of 2021. The number of new entrants to the labor force was essentially unchanged over the year, at 501,000.

The sharpest decline in unemployment occurred in service occupations

After rising with the onset of the COVID-19 pandemic in 2020, the unemployment rate decreased for all five major occupational categories from 2020 to 2021.11 (Data are annual averages.) The jobless rate for service occupations had the sharpest decrease, declining by 5.2 percentage points, to 7.8 percent in 2021. Within this category, food preparation and serving-related occupations, with a jobless rate of 10.3 percent, and personal care and service occupations, with a jobless rate of 8.3 percent, had the largest declines in 2021. Even with the sharp declines in 2021, the jobless rate in service occupations was still well above its prepandemic level at the end of the year. Most notably, the rate for personal care and service occupations was twice as high as the rate in 2019. The jobless rates also declined in 2021 for production, transportation, and material-moving occupations (7.1 percent); natural resources, construction, and maintenance occupations (6.6 percent); sales and office occupations (5.3 percent); and management, professional, and related occupations (2.8 percent). The unemployment rates for all of the major occupational categories remained above their prepandemic values.

Unemployment rates decreased more for women than for men in four of the five major occupational categories from 2020 to 2021. For service occupations, the over-the-year decline in the unemployment rate was 4.7 percentage points for men and 5.6 percentage points for women. (See table 5.)

Table 5. Unemployment rates, by occupational group and gender, annual averages, not seasonally adjusted, 2020–21 (in percent)
Occupational groupTotalMenWomen
20202021Change, 2020–2120202021Change, 2020–2120202021Change, 2020–21

Management, professional, and related occupations

4.52.8-1.74.22.8-1.44.92.9-2.0

Management, business, and financial operations occupations

4.12.8-1.33.82.7-1.14.43.0-1.4

Professional and related occupations

4.92.8-2.14.62.9-1.75.12.8-2.3

Service occupations

13.07.8-5.212.67.9-4.713.37.7-5.6

Healthcare support occupations

7.35.9-1.47.55.3-2.27.36.0-1.3

Protective service occupations

5.13.9-1.23.93.6-0.38.74.8-3.9

Food preparation and serving-related occupations

19.610.3-9.320.811.1-9.718.59.7-8.8

Building and grounds cleaning and maintenance occupations

10.97.5-3.49.46.6-2.813.18.8-4.3

Personal care and service occupations

16.08.3-7.717.512.5-5.015.57.1-8.4

Sales and office occupations

8.05.3-2.77.24.9-2.38.55.5-3.0

Sales and related occupations

8.85.6-3.26.94.6-2.310.86.6-4.2

Office and administrative support occupations

7.35.0-2.37.95.5-2.47.14.8-2.3

Natural resources, construction, and maintenance occupations

8.96.6-2.38.66.4-2.212.59.1-3.4

Farming, fishing, and forestry occupations

10.38.9-1.48.48.3-0.115.710.9-4.8

Construction and extraction occupations

10.17.8-2.310.07.7-2.310.611.00.4

Installation, maintenance, and repair occupations

6.43.9-2.56.24.0-2.210.93.7-7.2

Production, transportation, and material moving occupations

10.27.1-3.19.86.9-2.911.67.6-4.0

Production occupations

9.05.8-3.28.55.5-3.010.06.3-3.7

Transportation and material moving occupations

11.18.0-3.110.67.8-2.813.28.8-4.4

Note: The unemployed are classified by occupation according to their last job, which may or may not be similar to the job they are currently seeking. Updated population controls are introduced annually with the release of January data. Effective with January 2020 data, occupations reflect the introduction of the 2018 Census occupational classification system into the Current Population Survey, or household survey. This classification system is derived from the 2018 Standard Occupational Classification. No historical data have been revised. Data for 2020 are not strictly comparable with earlier years.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

All six alternative measures of labor underutilization declined over the year

The U.S. Bureau of Labor Statistics (BLS) uses CPS data to construct six alternative measures of labor underutilization.12 Known as U-1 through U-6 (U-3 is the official unemployment rate), these measures tend to show similar cyclical patterns, but they provide additional insight into the degree to which labor resources are being underutilized. Each of the six measures decreased in 2021, but they all remained above their prepandemic levels. U-3 decreased by 2.6 percentage points, to 4.2 percent in the fourth quarter of 2021. All six measures continued to trend down since reaching highs early in the COVID-19 pandemic. (See chart 6.) (See the box that follows for more information about the six measures of labor underutilization.)

Alternative measures of labor underutilization

Six alternative measures of labor underutilization have long been available on a monthly basis from the Current Population Survey (CPS) for the United States as a whole. The official concept of unemployment (as measured in the CPS by U-3 in the U-1 to U-6 range of alternative measures) includes all jobless people who are available to take a job and have actively sought work in the past 4 weeks. The other measures encompass concepts both narrower (U-1 and U-2) and broader (U-4 through U-6) than the official concept of unemployment. The six measures are defined as follows:

  • U-1: people unemployed 15 weeks or longer, as a percent of the civilian labor force;
  • U-2: job losers and people who completed temporary jobs, as a percent of the civilian labor force;
  • U-3: total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate);
  • U-4: total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers;
  • U-5: total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers;
  • U-6: total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

Discouraged workers (included in the U-4, U-5, and U-6 measures) are people who are not in the labor force, want and are available for work, and had looked for a job sometime in the prior 12 months. They are not counted as unemployed because they had not actively searched for work in the 4 weeks preceding the survey. Discouraged workers are not currently looking for work specifically because they believe no jobs are available for them or there are none for which they are qualified. The marginally attached (included in the U-5 and U-6 measures) category includes discouraged workers. The criteria for the marginally attached are the same as for discouraged workers, with the exception that any reason can be cited for the lack of active job search in the prior 4 weeks. People at work part time for economic reasons (included in the U-6 measure) are those working less than 35 hours per week who want to work full time, are available to do so, and give an economic reason for working part time (for example, their hours had been cut back or they were unable to find a full-time job). These individuals are sometimes referred to as involuntary part-time workers.

Improvements in unemployment were also reflected in labor force status flows

Each month, BLS reports on the number of people who are employed, unemployed, and not in the labor force, as measured by the CPS. A great deal of underlying movement contributes to the relatively small over-the-month net changes that typically occur in the different labor force statuses. These gross movements are captured by labor force status flows data, which show that millions of people move between employment and unemployment each month, while millions of others leave or enter the labor force.13 In 2021, 17.2 million people, or 6.6 percent of the population, changed their labor force status in an average month. Examining the current status (employed, unemployed, or not in the labor force) of people who were unemployed in the previous month provides a greater understanding of unemployment in 2021.

Historically, unemployed people are more likely to remain unemployed from one month to the next than to either find employment or leave the labor force. The likelihood of unemployed people remaining unemployed tends to increase during labor market downturns, as it did after the onset of the COVID-19 pandemic. The share of unemployed people who remained unemployed declined in 2021; at about 50 percent in December 2021 (calculated as a 3-month moving average), the share is roughly comparable with its value at the end of 2019. The likelihood of unemployed people finding employment edged up over the year, and the percentage who stopped looking and left the labor force increased in 2021. In December 2021, 27.7 percent of people who were unemployed a month earlier found work, while 24.0 percent stopped looking for work and left the labor force. (See chart 7.)

Number of people not in the labor force who wanted a job continued to trend down

People who are neither employed nor unemployed are classified as not in the labor force.14 In 2021, the number of people not in the labor force decreased by 385,000, reaching 100.0 million by the end of the year. Although most people who are not in the labor force do not want a job (about 95 percent at the end of 2021), the number of people not in the labor force who indicated that they did want a job fell by 1.2 million, to 5.8 million at the end of 2021.15 The measure remains above its prepandemic level of 4.8 million in the fourth quarter of 2019. The remaining people not in the labor force, numbering 94.2 million in the fourth quarter of 2021, did not want a job. (See table 6.)

Table 6. Number of people not in the labor force, quarterly averages, seasonally adjusted, 2020–21 (in thousands)
CategoryFourth quarter 20202021Change, fourth quarter 2020–21
First quarter 2021Second quarter 2021Third quarter 2021Fourth quarter 2021

Total not in the labor force

100,399100,533100,253100,165100,014-385

People who currently want a job

7,0276,9006,5456,0495,822-1,205

Marginally attached to the labor force[1]

2,0741,8821,8741,7271,645-429

Discouraged workers[2]

633553586446456-177

[1] This category includes people who want a job, have searched for work during the prior 12 months, and were available to take a job during the reference week but had not looked for work in the 4 weeks prior to the survey.

[2] This category includes people who did not actively look for work in the 4 weeks prior to the survey for reasons such as thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

Among people not in the labor force who currently want a job, the number defined as marginally attached to the labor force, at 1.6 million in the fourth quarter of 2021, fell by 429,000 over the year. These individuals wanted a job, had searched for work sometime in the previous year, and were available to work if a job had been offered to them. Still, they are not counted as unemployed because they had not actively searched for work in the 4 weeks preceding the survey.

In addition to declining unemployment and increasing employment, another measure that reflected the improvement in the labor market in 2021 is the number of discouraged workers. Among the marginally attached, people currently not looking for work specifically because they felt that no jobs were available for them are defined as discouraged workers. The number of discouraged workers declined by 177,000 over the year, to 456,000 in the fourth quarter of 2021. (See chart 8.)

Employment continued to trend up in 2021

After falling by 20.1 million in the second quarter of 2020 following the onset of the COVID-19 pandemic, employment growth recovered more than half (12.2 million) of those losses in the second half of that year. Employment growth continued in 2021, and by the fourth quarter, the number of people employed averaged 155.2 million, up by 5.4 million from the previous year. The employment–population ratio (the percentage of the population ages 16 years and older who are employed) also increased in 2021. This ratio increased by 1.8 percentage points over the year, to 59.2 percent, but it remains 1.8 percentage points below its level in the fourth quarter of 2019. (See table 1 and chart 9.)

Labor market conditions improved for both women and men in 2021. From the fourth quarter of 2020 to the fourth quarter of 2021, employment increased by 2.5 million for women and by 2.9 million for men. The employment–population ratio increased by 1.7 percentage points for women, compared with 2.0 percentage points for men. (See table 1.)

Employment–population ratios increased for all race and ethnicity groups

Employment rose for all race and ethnicity groups, and this was reflected in their employment–population ratios. The over-the-year increase in the employment–population ratio was greatest for Asians, followed by Hispanics, Blacks, and Whites.

The employment–population ratio for Asians rose by 4.3 percentage points, to 62.5 percent in 2021.16 The ratio is essentially the same as the prepandemic figure of 62.6 percent in the fourth quarter of 2019. The employment–population ratio for Hispanics, at 62.5 percent in the fourth quarter of 2021, increased by 2.9 percentage points over the year. The employment–population ratio for Blacks increased by 2.6 percentage points, to 56.5 percent, after having fallen below 50.0 percent in the second quarter of 2020. (See table 1.) The employment–population ratio for Whites, at 59.4 percent in the fourth quarter of 2021, rose by 1.5 percentage points over the year. The ratios for Whites, Blacks, and Hispanics were still below the ratios seen before the COVID-19 pandemic.

People ages 16 to 24 did well in the labor market in 2021

Among people ages 16 to 24, employment rose over the year by 885,000, or 4.9 percent. Much of that rise in employment occurred in the 20- to-24-year age group, which accounted for 75.4 percent of the increase. The employment–population ratio for people ages 16 to 24 was 51.3 percent in the fourth quarter of 2021, 2.7 percentage points higher than it was a year earlier, and essentially the same as in the fourth quarter of 2019 (51.4 percent). (See table 2.)

The number of employed people ages 25 to 54 rose by 3.4 million, or 3.5 percent, from the fourth quarter of 2020 to the fourth quarter of 2021. The employment–population ratio rose by 2.6 percentage points over the year, to 78.7 percent. Both measures are still below their prepandemic levels.

Employment among people ages 55 years and older increased by 1.1 million, or 3.2 percent, in 2021. The employment–population ratio for older workers, at 37.2 percent in the fourth quarter of 2021, rose by 0.7 percentage point over the year. Despite these increases, both measures remained below their prepandemic levels at the end of 2021.

Employment growth was strongest for people with more education

For people ages 25 years and older, employment among those with less than a high school diploma, at 8.3 million, was essentially unchanged from the fourth quarter of 2020 to the fourth quarter of 2021. However, the employment–population ratio for this group rose by 1.5 percentage points, to 42.7 percent in 2021. Employment increased by 4.3 percent over the year for high school graduates with no college, raising the level to 33.7 million. The employment–population ratio for this group increased by 1.7 percentage points over the year, to 52.7 percent. Employment among people with some college or an associate’s degree increased by 1.9 percent in 2021, to 34.1 million. The employment–population ratio for this group rose 1.8 percentage points, to 60.3 percent. Employment among people with a bachelor’s degree and higher increased 4.4 percent over the year, rising to 59.8 million in the fourth quarter of 2021. The employment–population ratio for this group rose 1.3 percentage points, to 70.4 percent. Nevertheless, both measures remained below their prepandemic levels. (See table 3.)

Labor force participation rates increased slightly over the year for most race and ethnicity groups, with Asians showing the most improvement

Even as the unemployment rate declined to a level that is relatively low by historical standards and employment continued to grow, the net effect was a moderate increase in the labor force.17 The labor force participation rate increased by 0.3 percentage point over the year, to 61.8 percent in the fourth quarter of 2021; the rate was 63.3 percent in the fourth quarter of 2019, before the pandemic. The labor force participation rate increased for men by 0.2 percentage point, to 67.7 percent, and for women by 0.4 percentage point, to 56.3 percent. (See table 1 and chart 9.)

The labor force participation rate for Asians increased by 2.6 percentage points over the year, to 65.1 percent, slightly higher than the prepandemic rate of 64.4 percent. Labor force participation rates for Blacks and Hispanics edged up by 0.6 percentage point each in 2021. The rate for Blacks was 60.8 percent in the fourth quarter, while the rate for Hispanics was 66.0 percent. Hispanics had the highest participation rate among the major race and ethnicity groups. However, the rates for Blacks and Hispanics are still below their prepandemic levels. The labor force participation rate for Whites was unchanged over the year, at 61.6 percent, and remained below the prepandemic rate of 63.2 percent in the fourth quarter of 2019. (See table 1.)

Recent improvements in relation to the effects of the COVID-19 pandemic and in labor market conditions have narrowed the differences in the labor force participation rates among demographic groups. However, other factors help explain the relatively moderate increase in the labor force participation rate in 2021, such as people choosing not to work because of health risks, early retirements, and family-care duties.18

Growth in labor force participation rates was similar for young people and those of prime working age

The labor force participation rate for prime-working-age people, those ages 25 to 54, rose by 0.8 percentage point over the year, to 81.8 percent in the fourth quarter of 2021. Among people ages 16 to 24, the rate increased by 0.7 percentage point, to 56.0 percent. Within this group, the labor force participation rate for those ages 20 to 24 increased by 1.2 percentage points in 2021, to 71.7 percent. Although labor force participation rates for young workers have historically been lower than the rates for older age groups, they have rebounded more quickly than those of the other age groups since the COVID-19 pandemic began.19 The labor force participation rate for people ages 55 years and older was 38.4 percent in the fourth quarter of 2021, compared with 40.3 percent in the fourth quarter of 2019. Some researchers have suggested that this decline may reflect an increase in the number of early retirements, what has sometimes been called the “Great Resignation,” which could be dragging down the overall labor force participation rate.20 (See table 2.)

Labor force participation rates changed little across different educational groups

For workers ages 25 years and older with less than a high school diploma, the labor force participation rate was 45.5 percent in the fourth quarter of 2021, essentially unchanged from the fourth quarter of 2020. (See table 3.) Although this rate is 0.9 percentage point below the rate for the fourth quarter of 2019, before the pandemic, it is closer to the prepandemic rate than are the comparable rates for other educational attainment groups.21

The labor force participation rate for high school graduates with no college, at 55.5 percent in the fourth quarter of 2021, was unchanged over the year but down by 2.4 percentage points from its prepandemic level. The rate for workers with some college or an associate’s degree, at 62.7 percent, was little changed from a year earlier and down by 2.0 percentage points from the fourth quarter of 2019. The labor force participation rate for people with higher levels of education—those with a bachelor’s degree and higher—at 72.1 percent in the fourth quarter of 2021, was also little changed from the prior year. The 2021 rate for this group was 1.7 percentage points below the prepandemic rate.

Employment rose substantially in all major occupation groups

Of the major occupation groups, the largest employment growth in 2021 occurred in service occupations, with an increase of 1.6 million workers, or 6.8 percent. (These are annual averages.) Service occupations saw the sharpest decline in employment at the onset of the COVID-19 pandemic, in early 2020. Within this occupational group, employment in food preparation and serving-related occupations rose sharply over the year. (See table 7.)

Table 7. Employment, by occupational group and gender, annual averages, 2020–21 (in thousands)
Occupational groupTotalMenWomen
20202021Change,
2020–21
20202021Change,
2020–21
20202021Change,
2020–21

Total, 16 years and older

147,795152,5814,78678,56080,8292,26969,23471,7522,518

Management, professional, and related occupations

63,64464,7441,10030,73431,10937532,91033,636726

Management, business, and financial operations occupations

27,14327,86472115,02815,23120312,11412,633519

Professional and related occupations

36,50236,88037815,70615,87817220,79621,003207

Service occupations

22,85324,4031,5509,82010,32850813,03314,0751,042

Healthcare support occupations

4,7904,88797703728254,0874,15871

Protective service occupations

3,0242,987-372,3102,276-34714711-3

Food preparation and serving related occupations

6,5567,3708142,9893,3433543,5664,027461

Building and grounds cleaning and maintenance occupations

5,0845,4823983,0363,1981622,0482,285237

Personal care and service occupations

3,3993,67627778178322,6182,893275

Sales and office occupations

29,72630,16644011,50611,6049818,22118,563342

Sales and related occupations

14,16814,3692017,2617,219-426,9077,150243

Office and administrative support occupations

15,55815,7972394,2444,38414011,31411,41399

Natural resources, construction, and maintenance occupations

13,35713,95960212,60713,18157475077828

Farming, fishing, and forestry occupations

1,0451,06116793804112522575

Construction and extraction occupations

7,7108,0573477,4027,7463443083113

Installation, maintenance, and repair occupations

4,6024,8402384,4114,63021919021020

Production, transportation, and material moving occupations

18,21519,3091,09413,89414,6087144,3214,700379

Production occupations

7,5907,9503605,4435,7032602,1472,247100

Transportation and material moving occupations

10,62511,3597348,4518,9064552,1742,453279

Note: Updated population controls are introduced annually with the release of January data.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

Management, professional, and related occupations is the largest of the major occupational groups, accounting for about 42.4 percent of the total number of employed people in 2021. Employment in this group grew by 1.1 million from 2020 to 2021, or 1.7 percent. This occupational group had the smallest decline in employment at the onset of the pandemic. Within this group, employment in management, business, and financial operations expanded by 721,000 in 2021, and the number of workers in professional and related occupations was little changed.

Employment in production, transportation, and material-moving occupations increased by 6.0 percent over the year, to 19.3 million. Employment in this occupational group is up by 681,000 from its prepandemic level in 2019. Employment in sales and office occupations increased by 1.5 percent over the year, to 30.2 million. Employment in natural resources, construction, and maintenance occupations increased from 13.4 million in 2020 to 14.0 million in 2021, little changed from its prepandemic level of 14.3 million.

Number of self-employed workers continued to trend up

In general, during labor market downturns, employment drops, although the degree of the decline often varies by industry and occupation, depending on the underlying causes of the economic contraction. This was certainly the case during the recent recession caused by the COVID-19 pandemic. This procyclical response affects many of the self-employed, whose businesses often suffer from the drop in demand for their products and services, sometimes resulting in the failure of the business. At the same time, a countercyclical effect could result in a rise in self-employment, if laid-off wage and salary workers decide to start businesses of their own.

The number of nonagricultural self-employed workers whose businesses were unincorporated declined sharply at the onset of the pandemic but was essentially the same as its prepandemic level by the first quarter of 2021. During 2021, the total number of nonagricultural self-employed trended up, reaching 9.3 million in the fourth quarter, up by 678,000 over the year.22 This amounts to an increase of 7.8 percent over the year, compared with a gain of 3.7 percent for total employment growth in nonagricultural industries. The increase coincides with complaints from many U.S. companies about not being able to find and retain enough employees in the aftermath of the pandemic.23 (See table 8.)

Table 8. Employed people, by class of worker, quarterly averages, seasonally adjusted, 2020–21 (in thousands)
Class of workerFourth quarter 20202021Change, fourth quarter 2020–21
First quarterSecond quarterThird quarterFourth quarter

Agriculture and related industries

2,4642,3292,2922,2812,272-192

Wage and salary workers

1,5761,5371,5511,5471,471-105

Self-employed workers, unincorporated

845724701718766-79

Nonagricultural industries

147,218147,947149,308151,110152,8045,586

Wage and salary workers

138,615139,244139,998141,227143,4954,880

Self-employed workers, unincorporated

8,6568,9429,1409,4919,334678

Note: Both agricultural and nonagricultural wage and salary workers include self-employed workers whose businesses are incorporated.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

The nonagricultural self-employment rate—the proportion of total nonagricultural employment made up of the self-employed—was 6.0 percent at the end of 2021, compared with its prepandemic level of 5.6 percent in the fourth quarter of 2019. (See chart 10.)

Number of people employed part time for economic reasons declined over the year

Also referred to as involuntary part-time employment and thought of as one type of underemployment, the number of people who worked part time for economic reasons—those who worked less than 35 hours per week but would have preferred full-time employment—ended the fourth quarter of 2021 at 2.3 million lower than a year earlier, returning to prepandemic levels.24 Historically, slack work or unfavorable business conditions, rather than an inability to find full-time work, have been the primary reason for working part time involuntarily. The number of involuntary part-time workers has been decreasing since it reached a high of 10.2 million in the second quarter of 2020. The number of people employed part time involuntarily, at 4.2 million in the fourth quarter of 2021, was little different from the level seen in 2019. (See chart 11.)

At the end of 2020, men continued to make up slightly more than half of all involuntary part-time workers. The number of men who worked part time for economic reasons decreased by 1.1 million, or 34.4 percent, from the fourth quarter of 2020 to the fourth quarter of 2021, ending the year at 2.2 million. Over the same period, the number of women working part time for economic reasons decreased by 1.1 million, or 36.7 percent, to 1.9 million. (These data are not seasonally adjusted.)

Unemployment rate for veterans remained lower than the rate for nonveterans

There were 18.0 million veterans ages 18 years and older in the civilian noninstitutional population in the fourth quarter of 2021. Veterans who served during World War II, the Korean War, and the Vietnam era account for the largest share of the veteran population, at 6.3 million, followed by veterans who served during Gulf War era II (4.6 million) and Gulf War era I (3.1 million). Nearly 3.9 million veterans served on active duty during “other service periods,” mainly between the Korean War and the Vietnam era and between the Vietnam era and Gulf War era I. Among veterans, women accounted for 10.7 percent of the total veteran population in the fourth quarter of 2021.

The unemployment rate for veterans was 3.6 percent in the fourth quarter of 2021 (not seasonally adjusted), down by 2.1 percentage points over the year. This rate is down by 6.2 percentage points from its peak in the second quarter of 2020, when it was 9.8 percent. The unemployment rate for nonveterans, at 3.9 percent in the fourth quarter of 2021, decreased by 2.6 percentage points over the year. The unemployment rate for male veterans, at 3.5 percent, decreased by 2.4 percentage points in 2021, while the jobless rate for female veterans, at 4.4 percent, changed little over the same period. The jobless rate for Gulf War-era II veterans (those who served from September 2001 to the present) decreased by 2.0 percentage points from a year earlier, to 4.1 percent. (See table 9.)

Table 9. Employment status of people 18 years and older, by veteran status, period of service, and gender, quarterly averages, not seasonally adjusted, 2020–21 (levels in thousands)
Employment status, veteran status, and period of serviceTotalMenWomen
Fourth quarter 2020Fourth quarter 2021Change, fourth quarter 2020–21Fourth quarter 2020Fourth quarter 2021Change, fourth quarter 2020–21Fourth quarter 2020Fourth quarter 2021Change, fourth quarter 2020–21

Veterans, 18 years and older

Civilian noninstitutional population

18,31917,951-36816,41116,029-3821,9081,92113

Civilian labor force

8,7218,409-3127,6077,247-3601,1141,16248

Participation rate

47.646.8-0.846.445.2-1.258.460.52.1

Employed

8,2228,102-1207,1616,991-1701,0621,11149

Employment–population ratio

44.945.10.243.643.60.055.657.82.2

Unemployed

499307-192446256-1905251-1

Unemployment rate

5.73.6-2.15.93.5-2.44.74.4-0.3

Gulf War-era II veterans

Civilian labor force

3,5023,6201182,9603,0488854157231

Participation rate

77.478.71.379.280.51.368.470.31.9

Employed

3,2893,4711822,7732,92415151654731

Employment–population ratio

72.775.52.874.277.23.065.267.32.1

Unemployed

213149-64187125-622625-1

Unemployment rate

6.14.1-2.06.34.1-2.24.74.3-0.4

Gulf War-era I veterans

Civilian labor force

2,2572,25701,9331,911-2232434622

Participation rate

73.271.7-1.574.472.0-2.467.070.23.2

Employed

2,1482,194461,8371,8612431033323

Employment–population ratio

69.769.70.070.770.1-0.664.167.63.5

Unemployed

10962-479549-461413-1

Unemployment rate

4.82.8-2.04.92.6-2.34.33.7-0.6

World War II, Korean War, and Vietnam-era veterans

Civilian labor force

1,1671,011-1561135960-175335118

Participation rate

17.516.1-1.417.615.8-1.814.023.09.0

Employed

1,111971-1401080925-155314615

Employment–population ratio

16.615.4-1.216.815.2-1.613.520.87.3

Unemployed

5640-165535-20154

Unemployment rate

4.83.9-0.94.83.6-1.2[1][1][1]

Veterans of other service periods

Civilian labor force

1,7951,521-2741,5791,328-251216193-23

Participation rate

44.538.9-5.643.537.8-5.754.049.0-5.0

Employed

1,6751,466-2091,4701,281-189204185-19

Employment–population ratio

41.537.5-4.040.536.5-4.051.147.0-4.1

Unemployed

12155-6610947-62128-4

Unemployment rate

6.73.6-3.16.93.6-3.35.44.1-1.3

Nonveterans, 18 years and older

Civilian noninstitutional population

233,980235,0531,073105,461106,245784128,519128,808289

Civilian labor force

149,779151,2771,49876,44277,32888673,33773,949612

Participation rate

64.064.40.472.572.80.357.157.40.3

Employed

140,099145,3995,30071,35674,2892,93368,74371,1102,367

Employment–population ratio

59.961.92.067.769.92.253.555.21.7

Unemployed

9,6805,877-3,8035,0863,039-2,0474,5942,838-1,756

Unemployment rate

6.53.9-2.66.73.9-2.86.33.8-2.5

[1] No data available, data do not meet publication criteria, or base is less than 60,000.

Note: Veterans are men and women who previously served on active duty in the U.S. Armed Forces and were not on active duty at the time of the survey. Nonveterans never served on active duty in the U.S. Armed Forces. Veterans could have served anywhere in the world during these periods of service: Gulf War era II (September 2001–present), Gulf War era I (August 1990–August 2001), Vietnam era (August 1964–April 1975), Korean War (July 1950–January 1955), World War II (December 1941–December 1946), and other service periods (all other periods). Veterans are only counted in one period of service: their most recent wartime period. Veterans who served in both a wartime period and any other service period are classified in the wartime period.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

The labor force participation rate for veterans, at 46.8 percent in the fourth quarter of 2021, changed little over the year, while the rate for nonveterans increased by 0.4 percentage point, to 64.4 percent. Labor force participation rates are generally lower for older people than they are for people of prime working age. Thus, the labor force participation rate for those who served during World War II, the Korean War, and the Vietnam era—who are all over the age of 60 and accounted for 35.1 percent of the veteran population—was 16.1 percent in the fourth quarter of 2021, down by 1.4 percentage points over the year. By contrast, Gulf War-era II veterans, who tend to be younger, had a much higher participation rate, 78.7 percent, which was little changed from a year earlier. The employment–population ratio for veterans, at 45.1 percent, also changed little over the year, while the ratio for nonveterans rose by 2.0 percentage points, to reach 61.9 percent in the fourth quarter of 2021. The employment–population ratio for Gulf War-era II veterans increased by 2.8 percentage points over the year, to 75.5 percent in the fourth quarter of 2021.

Unemployment rate for people with a disability more than twice that of those with no disability

Many demographic groups faced challenging labor market conditions in 2021, including people with a disability. The unemployment rate for people with a disability, at 8.2 percent in the last quarter of 2021, was more than double the rate for those without a disability (3.7 percent). (Data are not seasonally adjusted.) The rate for people with a disability decreased by 3.3 percentage points in 2021, compared with a decrease of 2.6 percentage points for those without a disability.

Among the 31.9 million people ages 16 years and older with a disability in the fourth quarter of 2021, 7.2 million, or 22.7 percent, participated in the labor force. By contrast, the participation rate for people with no disability was 67.2 percent. The lower rate for people with a disability reflects, in part, the older age profile of those with a disability; older people, regardless of disability status, are less likely to be in the labor force. About half of all people with a disability were ages 65 years and older, nearly 3 times the share of those with no disability. (See table 10.)

Table 10. Employment status of the civilian noninstitutional population, by gender, age, and disability status, quarterly averages, not seasonally adjusted, 2020–21 (levels in thousands)
Employment status, gender, and agePeople with a disabilityPeople with no disability
Fourth quarter 2020Fourth quarter 2021Change,
fourth quarter
2020–21
Fourth quarter 2020Fourth quarter 2021Change,
fourth quarter
2020–21

Total, 16 years and older

Civilian noninstitutional population

29,88031,8591,979231,200230,165-1,035

Civilian labor force

6,0787,2291,151154,434154,657223

Participation rate

20.322.72.466.867.20.4

Employed

5,3816,6341,253144,702148,8654,163

Employment–population ratio

18.020.82.862.664.72.1

Unemployed

697595-1029,7325,792-3,940

Unemployment rate

11.58.2-3.36.33.7-2.6

Men, 16 to 64 years

Civilian labor force

2,6513,01836776,44576,51065

Participation rate

35.038.33.381.582.00.5

Employed

2,3422,74840671,39273,5732,181

Employment–population ratio

30.934.94.076.178.92.8

Unemployed

310270-405,0532,937-2,116

Unemployment rate

11.78.9-2.86.63.8-2.8

Women, 16 to 64 years

Civilian labor force

2,3442,90456068,38968,490101

Participation rate

31.735.94.270.571.40.9

Employed

2,0372,65261564,22165,9051,684

Employment–population ratio

27.532.75.266.268.72.5

Unemployed

307252-554,1682,585-1,583

Unemployment rate

13.18.7-4.46.13.8-2.3

Total, 65 years and older

Civilian noninstitutional population

14,90715,88798040,42941,006577

Civilian labor force

1,0831,3062239,6009,65757

Participation rate

7.38.20.923.723.6-0.1

Employed

1,0031,2332309,0899,387298

Employment–population ratio

6.77.81.122.522.90.4

Unemployed

8073-7511271-240

Unemployment rate

7.45.6-1.85.32.8-2.5

Note: A person with a disability has at least one of the following conditions: is deaf or has serious difficulty hearing; is blind or has serious difficulty seeing even when wearing glasses; has serious difficulty concentrating, remembering, or making decisions because of a physical, mental, or emotional condition; has serious difficulty walking or climbing stairs; has difficulty dressing or bathing; or has difficulty doing errands alone such as visiting a doctor’s office or shopping because of a physical, mental, or emotional condition. Updated population controls are introduced annually with the release of January data.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

Unemployment rate for foreign-born workers differed little from that of native-born workers

The foreign born accounted for 17.8 percent of the U.S. civilian labor force ages 16 years and older in the fourth quarter of 2021, up from 17.0 percent a year earlier. For the past few years, the unemployment rate for the foreign born has been slightly lower than the jobless rate for the native born; however, after the rates for both groups peaked in the second quarter of 2020, the jobless rate for the foreign born remained slightly above the rate for the native born for the rest of 2020 and the first half of 2021. At the end of 2021, the jobless rate for the foreign born, at 3.9 percent, and the rate for the native born, at 4.0 percent, were nearly the same.

The unemployment rate for foreign-born people decreased more over the year (down by 3.3 percentage points) than did the rate for native-born people (down by 2.3 percentage points). The foreign-born jobless rate increased sharply in 2020, partly because of the relatively high concentration of foreign-born workers in the leisure and hospitality industry, which was hit particularly hard by the COVID-19 pandemic. This industry’s strong (though incomplete) recovery in 2021 may help explain the larger decrease in the foreign-born unemployment rate.25

The employment–population ratio for the foreign born increased by 3.3 percentage points over the year, rising to 62.9 percent in the fourth quarter of 2021, while the ratio for the native born increased by 1.5 percentage points, reaching 58.6 percent. (See table 11.)

Table 11. Employment status of the foreign- and native-born populations, by gender, quarterly averages, not seasonally adjusted, 2020–21 (levels in thousands)
Employment status and nativityTotalMenWomen
Fourth quarter 2020Fourth quarter 2021Change, fourth quarter 2020–21Fourth quarter 2020Fourth quarter 2021Change, fourth quarter 2020–21Fourth quarter 2020Fourth quarter 2021Change, fourth quarter 2020–21

Foreign born, 16 years and older

Civilian noninstitutional population

42,52343,8901,36720,44221,38694422,08122,503422

Civilian labor force

27,31428,7401,42615,69216,57588311,62312,165542

Participation rate

64.265.51.376.877.50.752.654.11.5

Employed

25,34027,6282,28814,71215,9991,28710,62811,6301,002

Employment–population ratio

59.662.93.372.074.82.848.151.73.6

Unemployed

1,9741,112-862979576-403995535-460

Unemployment rate

7.23.9-3.36.23.5-2.78.64.4-4.2

Native born, 16 years and older

Civilian noninstitutional population

218,557218,134-423105,852105,390-462112,705112,74439

Civilian labor force

133,198133,146-5269,32269,044-27863,87664,102226

Participation rate

60.961.00.165.565.50.056.756.90.2

Employed

124,743127,8703,12764,63466,2221,58860,10961,6481,539

Employment–population ratio

57.158.61.561.162.81.753.354.71.4

Unemployed

8,4555,276-3,1794,6882,822-1,8663,7672,454-1,313

Unemployment rate

6.34.0-2.36.84.1-2.75.93.8-2.1

Note: The foreign born are people residing in the United States who were not U.S. citizens at birth. That is, they were born outside the United States or one of its outlying areas, such as Puerto Rico or Guam, to parents who were not U.S. citizens. This group includes legally admitted immigrants, refugees, students, temporary workers, and undocumented immigrants. The survey data, however, do not separately identify the number of people in these categories. The native born are people who were born in the United States or one of its outlying areas, such as Puerto Rico or Guam, or who were born abroad of at least one parent who was a U.S. citizen.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

The labor force participation rate increased for both the native born and the foreign born. Foreign-born people continued to have a higher labor force participation rate than native-born people. The rate for the foreign born, at 65.5 percent in the fourth quarter of 2021, increased by 1.3 percentage points over the year. By way of comparison, the rate for the native born was about unchanged over the year, at 61.0 percent.

Share of workers who teleworked because of the pandemic decreased over the year

In May 2020, new questions were added to the CPS to help measure the impact of the COVID-19 pandemic on the labor market.26 The questions gathered information on whether people teleworked because of the pandemic, whether people were unable to work because their employer closed or lost business because of the pandemic, whether they received pay for the time they were unable to work, and whether people were unable to look for work because of the pandemic.27 (These data are not seasonally adjusted and are available as monthly estimates.) The share of the employed who teleworked because of the COVID-19 pandemic trended downward during the second half of 2020 and throughout 2021. In December of 2021, 11.1 percent of employed people teleworked or worked from home because of the pandemic. (See table 12.)

Table 12. Percentage of people who teleworked, were prevented from working, were paid for hours not worked, and did not look for work because of the COVID-19 pandemic, not seasonally adjusted, January–December 2021
MonthTeleworked[1]Prevented from working[2]Paid for hours not worked[3]Did not look for work[4]

January

23.25.712.74.6

February

22.75.110.54.1

March

21.04.410.23.7

April

18.33.69.32.8

May

16.63.09.32.5

June

14.42.410.01.6

July

13.22.09.11.6

August

13.42.213.91.5

September

13.21.915.51.6

October

11.61.513.31.3

November

11.31.415.81.2

December

11.11.215.91.1

[1] People who teleworked or worked from home because of the coronavirus disease 2019 (COVID-19) pandemic in the 4 weeks prior to the survey. Only employed people are asked this question. This group does not include people whose telework was not related to the pandemic.

[2] People who were unable to work during the 4 weeks prior to the survey because their employer closed or lost business as a result of the COVID-19 pandemic.

[3] People who received pay from their employer for hours not worked in the 4 weeks prior to the survey. The question is asked of people who were unable to work because of the COVID-19 pandemic.

[4] People who were prevented from looking for work during the 4 weeks prior to the survey because of the COVID-19 pandemic. The question is asked of people who were not in the labor force at the time of the survey.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

In December 2021, 3.3 percent of workers ages 16 to 24 had teleworked in the 4 weeks prior to the survey because of the COVID-19 pandemic, compared with 13.0 percent of workers ages 25 to 54 and 10.2 percent of workers ages 55 years and older. Although some workers were able to continue to work remotely in 2021, telework was not a viable option for people who work in food preparation and serving-related occupations (who tend to be younger), and this was reflected in the data on COVID-19 pandemic-related telework. (See table 13.)

Table 13. Employed people who teleworked or worked at home for pay at any time in the 4 weeks prior to the survey because of the COVID-19 pandemic, by selected characteristics, December 2021 (levels in thousands)
CharacteristicDecember 2021
Total employedPeople who teleworked because
of the COVID-19 pandemic
Percent distribution
TotalPercent of total
employed
Total employedPeople who teleworked
because of the COVID-19 pandemic

Total, 16 years and over

155,73217,35811.1100.0100.0

16 to 24 years

18,8256203.312.13.6

25 to 54 years

100,01612,98813.064.274.8

55 years and over

36,8913,75010.223.721.6

Total, 25 years and over

136,90716,73812.2100.0100.0

Less than a high school diploma

8,271801.06.00.5

High school graduates, no college[1]

34,1541,1843.524.97.1

Some college or associate’s degree

34,3352,5667.525.115.3

Bachelor’s degree and higher[2]

60,14712,90821.543.977.1

Bachelor’s degree only

37,0527,26819.627.143.4

Advanced degree

23,0965,63924.416.933.7

[1] This category includes people with a high school diploma or equivalent.

[2] This category includes people with bachelor’s, master’s, professional, and doctoral degrees.

Note: People who teleworked because of the coronavirus disease 2019 (COVID-19) pandemic are those who teleworked or worked at home for pay specifically because of the pandemic. This does not include those whose telework was unrelated to the pandemic, such as those who worked entirely from home before the pandemic began. Data are not seasonally adjusted.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

People with higher levels of educational attainment were more likely to telework because of the COVID-19 pandemic than were those with less education. This largely reflects the occupational and industry differences among these workers. In December 2021, among workers ages 25 years and older, 24.4 percent of people with an advanced degree and 19.6 percent of those with only a bachelor’s degree had teleworked or worked from home because of the pandemic in the 4 weeks prior to the survey. By contrast, only 1.0 percent of people with less than a high school diploma had teleworked in the prior 4 weeks because of the pandemic.

In May 2020, 49.8 million people (19.2 percent of the population) reported that at some point during the 4 weeks prior to the survey they were unable to work because their employer closed or lost business because of the COVID-19 pandemic. This measure includes people whose hours had been reduced and those who did not work at all. By December 2021, the number of people unable to work because of the pandemic had decreased considerably, to 3.1 million, or 1.2 percent of the population ages 16 years and older.

People who could not work because of the COVID-19 pandemic were asked if they had received any pay from their employer for hours they did not work in the 4 weeks prior to the survey. In May 2020, 17.6 percent of those unable to work because of the pandemic received at least some pay for the hours they did not work. This estimate was slightly lower in December 2021 (15.9 percent).

People who were not in the labor force were asked if the COVID-19 pandemic had prevented them from looking for work in the previous 4 weeks. In May 2020, 9.7 million people did not look for work because of the pandemic. In December 2021, 1.1 million were prevented from looking for work, down by 3.4 million from a year earlier.

Median weekly earnings for full-time wage and salary workers increased in 2021, but at a considerably slower pace than inflation

Median weekly earnings were $998 in 2021, up by 1.4 percent from 2020.28 (Data are annual averages.) During the same period, inflation—as measured by the Consumer Price Index for All Urban Consumers (CPI-U)—increased by 4.7 percent. Real median usual weekly earnings (adjusted with the use of the CPI-U) showed a decline of 3.1 percent from 2020.29 (See table 14.) Women’s median weekly earnings increased more than those of men; however, changes in median weekly earnings during the year should be interpreted with caution because they continue to reflect the impact of the pandemic on the labor market.30 Women’s earnings increased by 2.4 percent over the year while men’s earnings increased by 1.4 percent. The women’s-to-men’s earnings ratio edged up to 83.1 percent in 2021. In 1979, the first year for which comparable data on usual weekly earnings are available, women’s earnings were 62.3 percent of men’s earnings. (See chart 12.)

Table 14. Median usual weekly earnings of full-time wage and salary workers, by selected characteristics, annual averages, 2020–21
CharacteristicCurrent dollarsConstant (1982–84) dollars
20202021Percent change, 2020–2120202021Percent change, 2020–21

Total, 16 years and older

$984$9981.4$380$368-3.1

Men

1,0821,0971.4418405-3.2

Women

8919122.4344337-2.2

White

1,0031,0181.5388376-3.1

Men

1,1101,1251.4429415-3.2

Women

9059252.2350341-2.4

Black or African American

7948010.9307296-3.6

Men

830825-0.6321304-5.1

Women

7647761.6295286-3.0

Asian

1,3101,3281.4506490-3.2

Men

1,4471,4530.4559536-4.1

Women

1,1431,141-0.2442421-4.7

Hispanic or Latino ethnicity

7587772.5293287-2.1

Men

7978202.9308303-1.7

Women

7057181.8272265-2.7

Total, 25 years and older

1,0291,0572.7398390-1.9

Less than a high school diploma

6196261.1239231-3.4

High school graduate, no college

7818093.6302299-1.1

Some college or associate’s degree

9039252.4349341-2.2

Bachelor’s degree or higher

1,4211,4522.2549536-2.4

Note: The Consumer Price Index for All Urban Consumers is used to convert current dollars to constant (1982–84) dollars.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

For both men and women, earnings were lowest for those ages 16 to 24, followed by 25- to 34-year-olds. Median weekly earnings of those ages 35 to 64 ranged between $1,241 to $1,295 for men and $976 to $1,012 for women. The women’s-to-men’s earnings ratio was higher among younger workers than among older workers. For example, the ratio was 93.1 percent for 16- to 24-year-olds, compared with 78.1 percent among 45- to 54-year-olds. (See chart 13.)

Among the major race and ethnicity groups, median weekly earnings increased for all groups. In 2021, earnings increased by 2.5 percent for Hispanics ($777), 1.5 percent for Whites ($1,018), 1.4 percent for Asians ($1,328), and 0.9 percent for Blacks ($801). The women’s-to-men’s earnings ratio varied by race and ethnicity; the ratio was higher among Blacks and Hispanics. White women earned 82.2 percent as much as their male counterparts, compared with 94.1 percent for Black women, 78.5 percent for Asian women, and 87.6 percent for Hispanic women.

Among workers ages 25 years and older, high school graduates with no college had the largest over-the-year increase in median weekly earnings compared with other educational attainment groups. Earnings for high school graduates rose by 3.6 percent, to $809 in 2021. (See table 14.)

Among the major occupational groups, people employed full time in management, professional, and related occupations had the highest median weekly earnings: $1,609 for men and $1,222 for women. As has historically been the case, men ($723) and women ($598) employed in service occupations earned the least in 2021. (See table 15.)

Table 15. Median usual weekly earnings of full-time wage and salary workers, by occupation and gender, annual averages, 2020–21
Occupation and genderNumber of workers (in thousands)Median weekly earnings
2020202120202021Percent change,
2020–21

Total, 16 years and older

110,387114,316$984$9981.4

Management, professional, and related occupations

50,02351,1661,3561,3902.5

Management, business, and financial operations occupations

20,81121,5291,4611,4821.4

Professional and related occupations

29,21329,6371,2701,3355.1

Service occupations

13,77114,6306216443.7

Sales and office occupations

21,16521,7488098262.1

Sales and related occupations

8,9589,2818808870.8

Office and administrative support occupations

12,20712,4677818063.2

Natural resources, construction, and maintenance occupations

10,69011,1829059191.5

Farming, fishing, and forestry occupations

7878005896235.8

Construction and extraction occupations

5,8266,171906904-0.2

Installation, maintenance, and repair occupations

4,0774,2119841,0173.4

Production, transportation, and material moving occupations

14,73815,5907467743.8

Production occupations

6,8207,1077758094.4

Transportation and material moving occupations

7,9178,4837197382.6

Men, 16 years and older

60,91162,9281,0821,0971.4

Management, professional, and related occupations

24,09024,5611,5781,6092.0

Management, business, and financial operations occupations

11,08211,2311,6671,6720.3

Professional and related occupations

13,00813,3301,5321,5551.5

Service occupations

6,7407,0007047232.7

Sales and office occupations

8,4358,6779569701.5

Sales and related occupations

4,9915,0901,0461,0490.3

Office and administrative support occupations

3,4453,5878688993.6

Natural resources, construction, and maintenance occupations

10,15210,6359179301.4

Farming, fishing, and forestry occupations

6006516086374.8

Construction and extraction occupations

5,6355,965910908-0.2

Installation, maintenance, and repair occupations

3,9174,0199911,0233.2

Production, transportation, and material moving occupations

11,49412,0567968253.6

Production occupations

5,0555,2518418845.1

Transportation and material moving occupations

6,4396,8047597863.6

Women, 16 years and older

49,47651,3888919122.4

Management, professional, and related occupations

25,93326,6051,1641,2225.0

Management, business, and financial operations occupations

9,72910,2991,2741,3062.5

Professional and related occupations

16,20416,3061,1211,1674.1

Service occupations

7,0327,6305745984.2

Sales and office occupations

12,72913,0717467662.7

Sales and related occupations

3,9674,1917157200.7

Office and administrative support occupations

8,7628,8807567793.0

Natural resources, construction, and maintenance occupations

5385476826962.1

Farming, fishing, and forestry occupations

18714952858510.8

Construction and extraction occupations

191207796720-9.5

Installation, maintenance, and repair occupations

1601928018364.4

Production, transportation, and material moving occupations

3,2433,5356146383.9

Production occupations

1,7651,8566306533.7

Transportation and material moving occupations

1,4781,6796006244.0

Note: Updated population controls are introduced annually with the release of January data.

Source: U.S. Bureau of Labor Statistics, Current Population Survey.

Summary

In summary, major employment and unemployment measures from the CPS continued to show improvement in 2021. The national unemployment rate trended down in each quarter of 2021, reaching 4.2 percent by the end of the year. The jobless rate decreased for men and women, as well as for all major race and ethnicity groups. The unemployment rate decreased among all occupations, with the sharpest decline in service occupations. The employment–population ratio increased by 1.8 percentage points, to 59.2 percent in the fourth quarter of 2021, while the labor force participation rate improved at a much slower pace, rising by 0.3 percentage point to reach 61.8 percent by the end of the year. The level of self-employment in nonagricultural industries increased throughout 2021. The percentage of people who teleworked because of the COVID-19 pandemic declined throughout 2021 and ended the year at 11.1 percent.

Suggested citation:

Roxanna Edwards, Lawrence S. Essien, and Michael Daniel Levinstein, "U.S. labor market shows improvement in 2021, but the COVID-19 pandemic continues to weigh on the economy," Monthly Labor Review, U.S. Bureau of Labor Statistics, June 2022, https://doi.org/10.21916/mlr.2022.16

Notes


1 The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is the official arbiter of the beginning and ending dates of recessions and expansions in the United States. According to NBER, the most recent economic peak occurred in February 2020, and a trough occurred in April 2020. Or, in terms of quarters, the economic peak occurred in the fourth quarter of 2019 and a trough occurred in the second quarter of 2020. For the quarterly analysis in this article, the NBER-designated quarterly dates are used. According to NBER, the “trough” of a recession marks the beginning of an expansion, and the “peak” of an expansion marks the beginning of a recession. The February–April 2020 recession was the shortest recession ever identified by NBER. For more information, see “U.S. business cycle expansions and contractions” (National Bureau of Economic Research, last updated July 19, 2021), https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions.

2 For more information, see “Effects of COVID-19 pandemic on the Employment Situation news release and data” (U.S. Bureau of Labor Statistics, last modified January 7, 2022), https://www.bls.gov/covid19/effects-of-covid-19-pandemic-and-response-on-the-employment-situation-news-release.htm.

3 Although data from the Current Population Survey (CPS) are published monthly, the data analyzed in this article are seasonally adjusted quarterly averages, and all over-the-year changes are comparisons of fourth-quarter 2020 data with fourth-quarter 2021 data, unless otherwise noted.

4 In the CPS, unemployed people are defined as those ages 16 years and older who were not employed during the survey reference week, had actively searched for work during the 4 weeks prior to the survey, and were available for work. People who were on temporary layoff and available for work are counted as unemployed and do not have to have searched for work during the reference period.

5 The U.S. Bureau of Labor Statistics (BLS) produces two sets of national employment estimates each month from two different surveys: the estimate of total nonfarm jobs, derived from the Current Employment Statistics survey, also known as the establishment or payroll survey; and the estimate of total civilian employment, based on the CPS, also called the household survey. The two surveys use different definitions of employment, as well as different survey and estimation methods. For more information on the two monthly employment measures, see “Comparing employment from the BLS household and payroll surveys,” Labor Force Statistics from the Current Population Survey (U.S. Bureau of Labor Statistics, last modified February 4, 2022), https://www.bls.gov/web/empsit/ces_cps_trends.htm.

6 The duration of joblessness is the length of time (through the current reference week) that people classified as unemployed have been looking for work. This measure refers to the duration of the current spell of unemployment, rather than to that of a completed spell. Data for 27 weeks or longer are seasonally adjusted. Data for 52 weeks or longer are not seasonally adjusted.

7 Research suggests that, to some extent, the decrease in the number of long-term unemployed over the year can be explained by federal unemployment benefits that ended at the end of the third quarter of 2021, pushing down the number of long-term unemployed. For more information on the expiration of federal benefits, see Jim Tankersly and Ben Casselman, “Unemployment benefits expire for millions without pushback from Biden,” The New York Times, September 6, 2021, https://www.nytimes.com/2021/09/06/business/economy/unemployment-benefits.html.

8 For more information about duration of unemployment in 2020, see “36.9 percent of unemployed jobless 27 weeks or more as pandemic continues, November 2020,” The Economics Daily (U.S. Bureau of Labor Statistics, December 9, 2020), www.bls.gov/opub/ted/2020/36-point-9-percent-of-unemployed-jobless-27-weeks-or-more-as-pandemic-continues-november-2020.htm.

9 The CPS collects data on the different reasons that people are unemployed, including being on temporary layoff. Unemployed people on temporary layoff are those who (1) said they were laid off or were not at work during the survey reference week because of layoff (temporary or indefinite) or slack work or business conditions, (2) have been given a date to return or expect to be recalled within the next 6 months, and (3) could have returned to work if they had been recalled (except for those who had a temporary illness that prevented them from returning to work). Unlike other unemployed people, those on temporary layoff do not need to be actively looking for work to be classified as unemployed. Pay status is not part of the criteria for being classified as unemployed on temporary layoff. People absent from work because of temporary layoff are classified as unemployed on temporary layoff, whether or not they were paid during the time they were off work. Since March 2020, household survey interviewers have been instructed to classify employed people absent from work because of temporary, pandemic-related business closures or cutbacks as unemployed on temporary layoff. However, some workers affected by the pandemic who should have been classified as unemployed on temporary layoff were instead misclassified as employed but not at work. The share of responses that may have been misclassified was highest in the early months of the pandemic and has been considerably lower since. If the misclassified workers who were recorded as employed but not at work for the entire survey reference week had been classified as “unemployed on temporary layoff,” the total number of unemployed people and the unemployment rate would have been higher than reported. For more information, see “Effects of COVID-19 pandemic on the Employment Situation news release and data,” especially question 12, “Household survey: What is the misclassification issue?”

10 Some research has suggested that the number of reentrants to the labor force will increase as the economy improves, as some workers who left the labor force during the coronavirus disease 2019 (COVID-19) pandemic may reenter the labor market. See, for example, Rakesh Kochhar and Jesse Bennett, “U.S. Labor market inches back from the COVID-19 shock, but recovery is far from complete” (Pew Research Center, April 14, 2021), https://www.pewresearch.org/fact-tank/2021/04/14/u-s-labor-market-inches-back-from-the-covid-19-shock-but-recovery-is-far-from-complete/.

11 Beginning with data for January 2020, the CPS has classified occupations according to the 2018 Census occupational classification system, which is derived from the 2018 Standard Occupational Classification (SOC) system. The 2018 SOC system replaced the earlier 2010 Census occupational classification based on the 2010 SOC system, which was used in the CPS from January 2011 through December 2019. As a result of this change, CPS occupational data from January 2020 and later are not comparable with occupational data from earlier years. Although the names of the broad- and intermediate-level occupational groups in the 2018 SOC system remained the same, some detailed occupations were reclassified between the broader groups, which substantially affects data comparability over time. For example, within sales and office occupations, the office and administrative support occupations group is now smaller in scope. (The titles of the groups were unchanged.) Stock clerks and order fillers, which employed 1.5 million people in 2019, moved out of the broad group office and administrative support occupations and into transportation and material-moving occupations. Similarly, computer operators, which employed 72,000 people in 2019, moved out of office and administrative support occupations and into computer and mathematical occupations. In addition, within production, transportation, and material-moving occupations, the transportation and material-moving occupations group is now larger in scope because it includes stock clerks and order fillers. Finally, some detailed occupations were reclassified but remained in the same broad occupation category—within service occupations, for example, personal care aides, which employed 1.5 million people in 2019, moved from personal care and service occupations to healthcare support occupations. For more information, see “Industry and occupation classification” (U.S. Census Bureau, last revised October 8, 2021), https://www.census.gov/programs-surveys/cps/technical-documentation/methodology/industry-and-occupation-classification.html.

12 For more information, see Steven E. Haugen, “Measures of labor underutilization from the Current Population Survey,” Working Paper 424 (U.S. Bureau of Labor Statistics, March 2009), https://www.bls.gov/osmr/research-papers/2009/pdf/ec090020.pdf. See also John E. Bregger and Steven E. Haugen, “BLS introduces new range of alternative unemployment measures,” Monthly Labor Review, October 1995, https://www.bls.gov/opub/mlr/1995/10/art3full.pdf.

13 For more information, see “Research series on labor force status flows from the Current Population Survey,” Labor Force Statistics from the Current Population Survey (U.S. Bureau of Labor Statistics, last modified October 8, 2015), www.bls.gov/cps/cps_flows.htm.

14 For more information, see Steven F. Hipple, “People who are not in the labor force: why aren’t they working?” Beyond the Numbers, vol. 4, no. 15 (U.S. Bureau of Labor Statistics, December 2015), www.bls.gov/opub/btn/volume-4/people-who-are-not-in-the-labor-force-why-arent-they-working.htm.

15 “People not in the labor force who want a job” is a measure of people who reported wanting a job without having necessarily looked for one; this group includes all people who responded “yes” to the question, “Do you currently want a job, either full or part time?”

16 For more information on employment declines in the first year of the pandemic, see “Employment trends of Asians and Native Hawaiians and other Pacific Islanders,” Commissioner’s Corner (U.S. Bureau of Labor Statistics, May 24, 2021), https://blogs.bls.gov/blog/2021/05/24/employment-trends-of-asians-and-native-hawaiians-and-other-pacific-islanders/.

17 For more information, see Alyssa Flowers and Andrew Van Dam, “The most unusual job market in modern American history, explained,” The Washington Post, December 29, 2021, https://www.washingtonpost.com/business/2021/12/29/job-market-2021/.

18 For more information, see Katia Dmitrieva and Jill R Shah, “These out-of-work Americans tell us job market turmoil is anything but transitory,” Bloomberg Businessweek, October 14, 2021, https://www.bloomberg.com/news/features/2021-10-14/why-aren-t-out-of-work-americans-going-back-to-their-jobs.

19 See Mark Wasson, “Rising wages draw teen workers across region,” West Central Tribune, December 27, 2021, https://www.wctrib.com/business/rising-wages-draw-teen-workers-across-region.

20 For more information on the “Great Resignation,” see Andrew Van Dam “The latest twist in the ‘Great Resignation’: retiring but delaying Social Security,” The Washington Post, November 1, 2021, https://www.washingtonpost.com/business/2021/11/01/latest-twist-great-resignation-retiring-delaying-social-security/. See also Peter Coy, “The pandemic prompted people to retire early. Will they return to work?,” The New York Times, November 17, 2021, https://www.nytimes.com/2021/11/17/opinion/retirement-pandemic.html.

21 For more on this issue, see Jeanna Smialek and David McCabe, “The luckiest workers in America? Teenagers,” The New York Times, May 30, 2021, https://www.nytimes.com/2021/05/30/business/economy/pandemic-jobs-teenagers.html.

22 Since the late 1940s, data on self-employment have been collected regularly as part of the CPS. In addition to classifying employment by occupation and industry, the CPS subdivides the employed by “class of worker”—that is, wage and salary employees, self-employed, and unpaid family workers. In 1967, it became possible to identify another group of self-employed workers: those who reported in the CPS they were self-employed and had incorporated their businesses. Individuals choose to incorporate their businesses for several reasons, including legal and tax considerations. Since 1967, the official estimates of self-employment published by BLS have included only the unincorporated self-employed. Although it is possible to identify the incorporated self-employed separately, these individuals are counted as wage and salary workers in the official statistics because, from a legal standpoint, they are employees of their own businesses. For more information, see Steven F. Hipple and Laurel A. Hammond, “Self-employment in the United States,” Spotlight on Statistics (U.S. Bureau of Labor Statistics, March 2016), https://www.bls.gov/spotlight/2016/self-employment-in-the-united-states/.

23 See Josh Mitchell and Kathryn Dill, “Workers quit jobs in droves to become their own bosses,” The Wall Street Journal, November 29, 2021, https://www.wsj.com/articles/workers-quit-jobs-in-droves-to-become-their-own-bosses-11638199199. See also Eric Morath, “Millions are unemployed. Why can’t companies find workers?,” The Wall Street Journal, May 6, 2021, https://www.wsj.com/articles/millions-are-unemployed-why-cant-companies-find-workers-11620302440.

24 BLS produces measures of people at work part time for economic and noneconomic reasons from the CPS. People at work part time for economic reasons, also referred to as involuntary part-time workers, include those who gave an economic reason when asked why they worked 1 to 34 hours during the reference week (the week including the 12th of the month). Economic reasons include the following: slack work, unfavorable business conditions, inability to find full-time work, and seasonal declines in demand. People who usually work part time and were at work part time during the reference week must indicate that they wanted and were available for full-time work to be classified as part time for economic reasons.

25 See Rakesh Kochhar and Jesse Bennett, “Immigrants in the U.S. experienced higher unemployment in the pandemic but have closed the gap” (Pew Research Center, July 26, 2021), https://www.pewresearch.org/fact-tank/2021/07/26/immigrants-in-u-s-experienced-higher-unemployment-in-the-pandemic-but-have-closed-the-gap/.

26 For more information about the effects of the COVID-19 pandemic on the labor market, see “Supplemental data measuring the effects of the coronavirus (COVID-19) pandemic on the labor market,” Labor Force Statistics from the Current Population Survey (U.S. Bureau of Labor Statistics, last modified April 22, 2022), https://www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

27 People did not have to telework for the entire time that they worked to be counted among those who telework. People whose telework was not related to the COVID-19 pandemic, such as those who worked entirely from home before the pandemic, are not included in this measure.

28 Data are annual averages and are in current dollars. The CPS data on earnings represent earnings before taxes and other deductions and include any overtime pay, commissions, or tips typically received. For multiple jobholders, only earnings received at their main job are included. Earnings reported on a nonweekly basis are converted to a weekly equivalent. The term “usual” reflects each survey respondent’s understanding of the term. If the respondent asks for a definition of “usual,” interviewers are instructed to define the term as more than half the weeks worked during the past 4 or 5 months. Wage and salary workers are defined as those who receive wages, salaries, commissions, tips, payment in kind, or piece rates. This definition includes both public- and private-sector employees but excludes all self-employed people, regardless of whether their businesses are incorporated or unincorporated. Earnings comparisons made in this article are on a broad level and do not control for many factors that help explain earnings differences, such as job skills and responsibilities, work experience, and specialization. Finally, full-time workers are those who usually work 35 hours or more per week at their main job.

29 An unusually large increase in median weekly earnings occurred in the second quarter of 2020, but that reflected the precipitous declines in employment among lower paid workers (who were disproportionately affected by job loss related to the pandemic) compared with higher paid workers. When lower paid workers lost their jobs, they dropped out of the distribution of earnings, and this put upward pressure on the median (the midpoint of the earnings distribution). This large and abrupt shift in the earnings distribution during the year led to an increase in earnings in 2020; however, the underlying rate of growth in worker’s earnings is difficult to discern because of the sudden and dramatic shift in the earnings distribution.

30 The composition of the labor force and base effects help explain wage growth after the economy lost millions of jobs in April 2020. For more information, see Chair Cecilia Rouse and Martha Gimbel, “The pandemic’s effect on measured wage growth,” Council of Economic Advisors (White House, April 19, 2021), https://www.whitehouse.gov/cea/written-materials/2021/04/19/the-pandemics-effect-on-measured-wage-growth/.

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About the Author

Roxanna Edwards
edwards.roxanna@bls.gov

Roxanna Edwards is an economist in the Office of Employment and Unemployment Statistics, U.S. Bureau of Labor Statistics.

Lawrence S. Essien
essien.lawrence@bls.gov

Lawrence S. Essien is an economist in the Office of Employment and Unemployment Statistics, U.S. Bureau of Labor Statistics.

Michael Daniel Levinstein
levinstein.michael@bls.gov

Michael Daniel Levinstein is an economist in the Office of Employment and Unemployment Statistics, U.S. Bureau of Labor Statistics.

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