Unemployment rate inches up during 2023, labor force participation rises

The U.S. labor market continued to expand in 2023. Although there was an uptick in unemployment in the second half of the year, the national unemployment rate remained below 4 percent throughout 2023. The labor force participation rate, at 62.6 percent in the fourth quarter, increased over the year. Notable labor market improvements occurred among people of prime working age (those ages 25 to 54); these improvements were most pronounced among women. In the fourth quarter of 2023, the unemployment rate averaged 3.8 percent, slightly higher than the rate of 3.6 percent in the fourth quarter of 2022.1 The number of unemployed people was 6.3 million, up from 5.9 million at the end of 2022.2 Most of this modest increase in unemployment occurred in the latter half of 2023.