Thomas Barkin says unemployment rate is best job market measure

Richmond Federal Reserve Bank President Thomas Barkin has made his analytical priorities clear: when it comes to reading the US labor market, the unemployment rate is the signal, and almost everything else is noise.

Speaking ahead of the June jobs report, Barkin said he would focus primarily on the unemployment rate as his preferred gauge of labor market health. His reasoning is straightforward. The metric has hovered in a tight band of 4.1% to 4.3% for roughly a year, a range he described as “pretty stable.”

The ‘low-hire, low-fire’ economy

Job growth has been tepid at best. Employers added just 50,000 jobs in December 2025, a figure that barely registers in a labor force of more than 160 million people. A November 2025 speech by Barkin noted that three-month average job growth had slowed to approximately 29,000.

Barkin has characterized the current environment as a “low-hire, low-fire” situation. Companies aren’t laying people off in droves, but they’re also not exactly rolling out the welcome mat for new hires.

By August 2025, the unemployment rate stood at a historically low 4.3%. It inched up to 4.6% by January 2026 before settling back into its narrow corridor.

Why this matters for monetary policy

Barkin isn’t just offering academic commentary. As a member of the Federal Open Market Committee, his analytical framework directly influences the interest rate decisions that ripple through every corner of financial markets.

The Fed operates under a dual mandate: keep prices stable and maximize employment. When Barkin signals that unemployment is his primary labor market metric, and that metric looks “pretty stable,” he’s implicitly suggesting that the employment side of the mandate isn’t flashing red.

Reading between the lines

There’s a subtle tension in Barkin’s analysis worth unpacking. A stable unemployment rate between 4.1% and 4.3% is, by any reasonable historical standard, a sign of a healthy labor market. The US averaged roughly 5.7% unemployment over the past half century, so current levels look enviable by comparison.

The unemployment rate only counts people actively looking for work, so a decline in labor force participation could keep the headline number artificially low even as real economic conditions weaken.

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