US Unemployment Rate Reverses Course, Drops to 4.3% After Peak at 4.5%
@the_economist (The Economist) April 6, 2026 The unemployment rate has shifted into a downward trajectory, falling from October's peak of 4.5% to 4.3% in March 2026. This marks the first sustained decline after a gradual drift upward from the 3.9% lows of early 2024. The reversal occurs against a backdrop of persistent inflationary pressures, with the CPI reaching fresh highs above 327. This creates a complex policy environment for the Federal Reserve—labour market cooling was previously seen as necessary to durably suppress price growth. The simultaneous improvement in employment conditions alongside elevated inflation suggests either enhanced productivity dynamics or structural shifts in labour supply. What factors might explain this apparent decoupling of traditional Phillips Curve relationships?