Don’t look now, but the employment level in the household survey has dropped six out of the past seven months by more than 1.8 million — as the unemployment rate sank again to 4.1 percent in July, down from 4.5 percent in November 2025, according to the latest data compiled by the U.S. Bureau of Labor Statistics.
That’s a 1.1 percent decrease from the prior peak seen in December 2025 of 163.9 million.
That’s significant, as that is more than some of the recessions during the postwar era, although less than others, with the average being almost 3.3 percent of job losses in the household survey since 1948.
In the 1949 recession, employment fell 1.77 million, or by 3 percent.
In the 1953 recession, employment fell 1.81 million, or by 2.95 percent.
In the 1958 recession, employment fell 1.81 million, or by 2.8 percent.
In the 1960-1961 recession, employment fell 893,000, or by 1.35 percent.
In the 1969-1970 recession, employment fell 432,000, or by 0.53 percent.
In the 1973-1975 recession, employment fell by 1.64 million, or by 1.88 percent.
In the 1980 recession, employment fell by 1.17 million, or by 1.17 percent.
In the 1981-1982 recession, employment fell by 1.65 million, or by 1.64 percent.
In the 1990-1991 recession, employment fell by 1.76 million, or by 1.47 percent.
In the 2001-2002 recession, employment fell by 1.14 million, or by 0.83 percent.
In the 2007-2009 recession, employment fell by 8.36 million, or 5.7 percent.
And in the 2020 Covid recession, employment fell by 25.6 million, or 16.15 percent.
On the other hand, economically things seem okay through the first couple of quarters of 2026, with the inflation-adjusted, real Gross Domestic Product growing by 2.1 percent in the first quarter and 1.5 percent in the second quarter.
One thing that makes the current labor force adjustment taking place unique is the Baby Boomer retirement wave now in full force. The civilian labor force contracted by 264,000 in July, but if you look at the population not in labor force over the age of 65, with and without a disability, that increased by 302,000 to 53 million.
The employment population ratio sank 58.9 percent, its lowest since September 2021, and down from its last peak of 60.4 percent in November 2023.
Meaning, as Baby Boomers retire, they are not being replaced by younger workers at the same pace. The labor force shrinks, comparatively, and the unemployment rate sinks among the smaller pool of workers, a factor that will need to be increasingly taken into consideration when examining labor markets going forward. As usual, stay tuned.
Robert Romano is the Executive Director of Americans for Limited Government Foundation.
