In 2025 the unemployment rate for young people (aged 20-24 years), both men and women, rose significantly. In August, the unemployment rate of young men was 9.9%, jumping from the December 2024 unemployment rate of 8.2%. The August unemployment rate for young men was the highest since July 2021. In August, the unemployment rate of young women was 8.5%, increasing from the December 2024 unemployment rate of 6.7%. The August unemployment rate for young women was the highest since August 2021. Part of the reason that young women have fared better than young men in the job market is recent industry hiring. For the twelve months ended August 2025, private education and health services, occupations typically dominated by women, led the hiring with an increase of 862,000 jobs. Leisure and hospitality ranked second with an increase of 232,000 jobs followed by government which added 138,000 jobs. Manufacturing led job losses with 78,000. Labor Market Trends – College and High School Graduates The graph below compares unemployment rates for three different worker groups: 1) Recent college graduates, workers aged 25 to 34 with a bachelor’s degree (blue line), 2) High school graduates, defined as workers aged 25 and over with no college (green line), and 3) All college graduates, workers aged 25 years and over with a bachelor’s degree (red line). Unemployment Rates for College and High School Graduates, aged 25+ Years January 2019 – August 2025 (Sources: U.S. Bureau of Labor Statistics via FRED)
Relative to December 2019, the August 2025 unemployment rate was up for all groups. The unemployment rate for high school workers (no college degree) increased from 3.7% to 4.3%, while the unemployment rate for recent college graduates rose from 2.0% to 3.6% and all college graduates from 2.0% to 2.7%. Beginning in 2019, the unemployment rate for recent college graduates has generally been higher than the unemployment rate for all college graduates. On a relative basis, it has been getting harder for recent college graduates to find a job, however the unemployment rate of recent college graduates has remained consistently lower than the unemployment rate for high school workers. Although it has been getting more difficult for recent college graduates to find a job, earnings still remain correlated to educational attainment. Consumer Spending Personal consumption accounts for approximately two-thirds of Gross Domestic Product, and personal consumption has been the key and consistent driver of economic growth since 2021. The table below shows how changes in the four components of Gross Domestic Product (GDP) contributed to the change in U.S. economic growth since 2021. Economic growth is measured by changes in GDP, which is the value of goods and services produced in a given time period. As indicated in the chart below, personal consumption generally contributed significantly more to GDP growth than investment spending (including business investment in equipment and inventories), government spending, or net exports. An exception occurred in the first quarter of 2025, as business investment increased significantly due to the pre-tariff inventory build-up.
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Center for Business and Economic Insight
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