The Labor Department’s official unemployment rate fell to 4.1% in July from 4.2% in June, but the Ludwig Institute for Shared Economic Prosperity’s broader functional unemployment measure rose to 24.9% from 24.7%, its fourth consecutive monthly increase. LISEP’s True Rate of Unemployment includes people without jobs, involuntary part-time workers and those earning poverty-level wages, while its broader measure of people who are not functionally employed also includes those who have left the labor force. July’s government data showed employers cut 23,000 nonfarm jobs, labor-force participation fell to 61.4%, and full-time employment dropped by 106,000 to 133.55 million. The official unemployment rate can decline when fewer people are working or seeking work, even if hiring is weak. Functional unemployment was 27.3% for Black workers, 23.8% for White workers and 26.7% for Hispanic workers. It fell to 19.5% for men but rose to 31% for women, the highest level since March 2021. LISEP Chairman Gene Ludwig said the divergence between the measures could point to weakening labor-market strength. Research cited in the report identifies retirements and lower immigration as factors that could shrink the labor pool, while analysis by Mark Zandi points to weakness among both foreign-born and native-born workers. The figures do not invalidate the official unemployment rate, but show that it captures less about participation, hours and job quality than LISEP’s broader methodology.