Unemployment Rate in 2023

The Misery Index in 2023

The Misery Index — a simple gauge coined by economist Arthur Okun — adds the unemployment rate to the inflation rate, on the idea that both eat into household wellbeing at the same time. The higher the sum, the more economic pain a typical household feels. Here's how 2023 stacks up:

So in 2023, a 3.64% jobless rate sat alongside 4.12% inflation, for a combined Misery Index of about 7.8. For the other half of that figure — what consumer prices did and what 2023's money is worth today — see inflation in 2023.

What happened to jobs in 2023

Unemployment reached its lowest level in the modern series amid an unusually tight labor market.

In 2023, the unemployment rate ran at 3.64%, little changed from 3.65% in 2022. That made it the lowest annual rate in the modern series, and below the long-run average of 5.68%. For comparison, unemployment sits at about 4.2% today — so even now the labor market is looser than it was that year.

How 2023 compared

Across the full 1991–2025 record, unemployment has averaged about 5.68%, so 2023 ran below that long-run norm. Within the 2020s, the jobless rate averaged roughly 4.82%, and 2023 sat below its own decade. Five years earlier, in 2018, the rate was 3.90%. The following year, 2024, unemployment rose to 4.02%.

The labor market and borrowing costs move together: a weak jobs market often pushes the Fed to cut rates, while a hot one invites hikes. See what mortgage rates did in 2023 for another angle on the same economy.

This is one year out of the whole story. For the complete history — every year since 1991, the all-time high and the record low, the decade-by-decade view, and what drives unemployment over time — see historical unemployment rates, 1991–today.