Although the national unemployment rate remained steady at 4.2% in July, more than 744,000 jobs have already been lost this year: there’s a deep economic volatility beyond the surface-level stability of employment figures.
While many sectors continue to add jobs, key areas, including federal agencies, nonprofits, finance, and retail, have endured dramatic losses. These job reductions are largely due to government restructuring efforts, particularly the actions of the Department of Government Efficiency (DOGE), as well as the economic impact of new international tariffs.
Our study of nationwide employment data includes an analysis of the growing discrepancy between the United States’ historically low unemployment rate and the surge in job cuts recorded during the first half of 2025.
We look at the areas and demographics most affected, and consider further implications, with some states especially vulnerable to job losses.
States With the Highest and Lowest Unemployment Rates
Though a steady national unemployment rate of 4.2% suggests superficial stability, that doesn’t tell the full story for many states. Our analysis of recent Bureau of Labor Statistics (BLS) figures tells us that California currently has the highest unemployment rate (5.4%), with South Dakota enjoying significantly better fortunes and the lowest unemployment rate (1.8%).
Mississippi experienced the largest year-over-year unemployment increase (up by 1.1%), while Indiana experienced the largest decrease (0.6%).
New Jersey ranks 6th in overall unemployment at 4.9%, with a 0.3% increase over the past year, while New York ranks 20th in the unemployment rate at 4.%, and saw one of the lowest year-over-year changes with a 0.3% decrease.
These state-level shifts indicate regional economic stress, particularly in the East and Southeast, where layoffs over 2025 have increased by 220% compared to 2024.
Here’s an overall top ten of states with the most layoffs in 2025.
Key Layoff Trends in 2025
Our review of employment reports and industry data also reveals a significant rise in job cuts in specific sectors and industries, often driven by federal policy changes and global trade disruptions.
National Layoff Overview
One major layoff statistic is the 744,308 jobs cut during the first half of 2025, a seismic number that marks the highest six-month total since the onset of the COVID-19 pandemic in early 2020. Yet, despite those cuts, the unemployment rate has remained within a narrow 4% to 4.2%.
Top Drivers of Job Cuts
The main contributory job cut factor in the US in 2025 is the DOGE-related restructuring intervention, which accounted for nearly 287,000 lost jobs. These cuts affected federal departments such as the Department of Health and Human Services, the Department of Education, and USAID.
Tariffs and global trade tensions also led to sizable job losses, with more than 154,000 financial sector employees laid off. Meanwhile,80,000 retail staff lost their jobs in early 2025, a 255% increase in the unemployment rate during the first half of 2024.
Nonprofit job losses also reached 17,000, a staggering 407% year-over-year increase, while 2,000 layoffs were due to the knock-on effects of foreign import tariffs. And the job-losses trend also claimed some extremely high-profile victims.
High-Profile Corporate Layoffs and Bankruptcies
Beyond broad sector trends, several major brands have either filed for bankruptcy or announced major layoffs in 2025. Microsoft recently conducted a second major round of layoffs already during 2025 and has cut around 9,000 jobs. Consumer-facing companies like 23andMe, Del Monte, and At Home have all filed for bankruptcy, which has in turn led to widespread job losses.
Such examples demonstrate that economic uncertainty can and does affect both federal institutions and private corporations across myriad industries.
At its worst, a financial downturn doesn’t discriminate between small and large businesses. And ultimately, the unemployment numbers continue to soar, with some demographics suffering far more than others.
Unemployment Insights
Although job growth continued in healthcare and social assistance sectors, adding approximately 73,000 jobs in July 2025, other areas of the labor force have become increasingly vulnerable. As such, unemployment numbers have risen.
The number of long-term unemployed (27+ weeks without work) rose by 179,000 in July, to 1.8 million, with the long-term unemployed now making up nearly 25% of unemployment figures.
Federal employment job numbers also dropped by 12,000 in July, totaling 84,000 fewer positions than at its January 2025 peak.
All job losses are more than just numbers – but who exactly has lost their position in terms of age, gender, and race or ethnicity?
Unemployment by Demographic
Breaking down unemployment rates among different demographic groups provides some interesting insights. Unemployment isn’t evenly distributed, these charts show how it differs across race and age.
The disproportionately high unemployment rates among teenagers and Black workers reflect broader disparities in job accessibility and job security, particularly during periods of restructuring.
On the markedly high teen worker job loss numbers, Bloomberg suggests that young adults are typically the first demographic hit when a downturn is imminent, making that alarming spike in teen unemployment a clear bellwether regarding broader, long-term labor market weakness.
Legal and Economic Implications of Some Unemployment Types
Not all layoffs are the same: those caused by government actions, policy shifts, and global economic decisions often lead to legal uncertainty for affected workers.
By understanding how these layoffs occur and which sectors or regions are most affected, you can identify potential legal missteps, such as unlawful termination during mass layoffs, discrimination in workforce reductions, and violations of federal WARN Act requirements.
In other words, you may have legal recourse for a claim against lost earnings. But you’ll first need to know where you stand legally, and for that, you’ll need to speak to an expert.
If you’ve been affected by a sudden job loss in New York or New Jersey, you may benefit from speaking to a New York employment lawyer to better understand your rights. Get in touch with us today at Levine AND Wiss for more information.