The US unemployment rate is worth singing about, with the widely followed and reported upon Household Survey Unemployment Rate (also known as U3) coming in at 3.6% in October, up ever so slightly from its 50-year low of 3.5% in September. For those who question how representative the Household Survey Unemployment Rate is of today’s US labor market, we would point you toward the  less widely followed and reported upon but much more comprehensive U6 unemployment rate, also known as Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time For Economic Reasons, As A Percent Of All Civilian Labor Force Plus All Marginally Attached Workers. The U6 may be a mouthful, but it is near a generational low of 7.0%, down from 17.1% in April 2010. However  you analyze it, the US labor market is in fantastic shape.

Given that the US economy is both 70% consumption-driven and the world’s largest, it is impossible to overstate the importance of the US consumer to domestic and global growth. The robust health of the US consumer has been among the reasons Brinker Capital has remained optimistic about both the US economy and US markets as we moved through 2019. Given the recent positive readings from the U3, the U6, and other consumer-facing data sets, including the US savings rate and the value of US  household equity, we see no reason to deviate from our constructive view on the US consumer and US economy as we move into year-end.

Finally, considering all the bands one could “cue” to sing about a US unemployment rate worth singing about, one might wonder why settle on UB40, a British reggae band that has been reasonably successful over its 40+ year history? In a nutshell, its name. The band named itself after a form issued to people claiming unemployment benefits in the UK, with the designation UB40 shorthand for “Unemployment Benefit, Form 40.” It’s a bit of a stretch for sure, but we think it works.

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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a registered investment advisor.

Tagged: market perspectives, Tim Holland, unemployment rate, yield curve, Federal Reserve