Nearly 25% of Americans are 'functionally unemployed,' study finds

Labor Department reports 139,000 jobs added in May

In May, job growth in the U.S. economy slowed compared to the previous two months. This slowdown reflects employer concerns coming from uncertainty surrounding future trade, tax, and monetary policies. LiveNOW’s Andrew Craft is speaking to Brit Morse from Fortune Magazine as the unemployment rate of 4.2% remained unchanged from the past two months.

WASHINGTON - A new report reveals an increase in "functional unemployment" as the official government jobless rate has remained steady.

What is ‘functionally unemployed,’ and why is it increasing?

By the numbers:

According to a report by the Ludwig Institute for Shared Economic Prosperity (LISEP), functional unemployment has increased, with a rate that has topped 24% for three consecutive months.

LISEP found that the percentage of the U.S. labor force who was functionally unemployed was 24.3% in April.

These rates grew and were highest among Hispanic(28.2%) and Black (26.7%) Americans. The rate for White workers decreased slightly, from 23.1% to 23%

FILE: Upset person looks at their bills. (Credit: Getty)

By sex, the rate was also higher among women (28.6%) than men (20%). 

Based on a recent True Rate of Unemployment (TRU) report, "functionally unemployed" refers to individuals who do not have a full-time job (35+ hours a week) but want one, have no job, or do not earn a living wage, conservatively pegged at $25,000 annually before taxes.

What they're saying:

"We are facing a job market where nearly one-in-four workers are functionally unemployed, and current trends show little sign of improvement," LISEP Chair Gene Ludwig said in a press release. "The harsh reality is that far too many Americans are still struggling to make ends meet, and absent an influx of dependable, good-paying jobs, the economic opportunity gap will widen."

US adds jobs at slower pace in May

Dig deeper:

The U.S. economy added jobs in May at a slower pace than in the past two months as uncertainty over the direction of trade, tax and monetary policy caused employers to pull back on hiring.

RELATED: What is a recession? Here's the criteria and where the U.S. stands

Last week, the Labor Department reported that employers added 139,000 jobs in May. That figure was slightly above the estimate of economists polled by LSEG, who projected 130,000 jobs added — though it was cooler than the initial report of 177,000 jobs added in April or the 185,000 jobs gained in March.

The unemployment rate was 4.2%, unchanged from the past two months and in line with the LSEG estimate.