Economic Letter
Brief summaries of SF Fed economic research that explain in reader-friendly terms what our work means for the people we serve.
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What’s Behind the Declining Trend Unemployment Rate?
Andreas Hornstein, Marianna Kudlyak, Greeshma Avaradi, Taerin Kim
The U.S. unemployment rate has trended down for decades. Estimates after removing business cycle fluctuations show that the trend rate fell from 7.8% in 1976 to 4.8% in 2024. This decline reflects in part a more-educated and older workforce—that is, a shift in composition towards demographic groups with traditionally lower unemployment rates. It also reflects…
