Conversation Starter (Update): Almost Half of Workers Live in a Metro Where the Unemployment Rate is Rising Sharply

This is an update of a chart we originally posted in September.

The unemployment rate increased to 3.9 percent in October from 3.8 percent in September according to data released earlier this month by the Bureau of Labor Statistics, but it remains low by historic standards.

In some communities, the increase over the past few months has been much larger. According to one commonly referenced guide – known as the Sahm Rule – a good predictor of recessions is when the national unemployment rate increases by 0.5 percentage points or more from its 12-month low.

A growing number of U.S. metro areas have crossed this psychologically-significant threshold in recent months – including several major tech industry hubs like San Francisco and San Jose, CA and Austin, TX. As of October 2023, 41 percent of the 390 largest U.S. metro areas – home to 49 percent of U.S. workers – have seen the local unemployment rate increase by at least 0.5 percentage points over the past year. These are up from 19 percent and 24 percent respectively in July.

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