The US unemployment rate would be materially higher without the US budget deficit: The US federal budget deficit stands at -7.0% of nominal GDP, twice the 2018-2019 pre-pandemic levels. In nominal terms, the budget gap reached $1.2 trillion over the first 6 months of FY2026, the 3rd-worst first-half of any fiscal year in history. Historically, a deficit of this magnitude has only occurred during a deep recession or a severe economic crisis, when unemployment was surging well above average. Based on the historical relationship between the two, a deficit of -7.0% of GDP would correspond to an unemployment rate of ~8.5%, nearly double the current rate, per Zerohedge. In other words, the current deficit may be one of the primary reasons unemployment has not spiked significantly higher. The US deficit is running at recessionary levels.