A Misleading Picture
At first glance, the U.S. labor market looks steady: unemployment at 4.2% in July 2025. But a new study conducted by Levine AND Wise shows that this stability is deceptive. Behind the numbers are 744,308 jobs lost in just six months, the highest half-year total since 2020.
The study argues that the human toll—long-term unemployment, demographic disparities, and legal uncertainty—tells a far more troubling story than the national average suggests.
Layoffs at Record Levels
The Department of Government Efficiency (DOGE) restructuring alone eliminated 287,000 federal jobs in 2025. Cuts hit agencies like Health and Human Services, Education, and USAID.
Other sectors saw similar devastation:
- Finance: 154,000 layoffs, tied to tariffs and global trade tensions.
- Retail: 80,000 jobs lost, a 255% increase from early 2024.
- Nonprofits: 17,000 layoffs, a 407% year-over-year increase.
These figures highlight how policy shifts and global economics ripple through the workforce.
The Long-Term Unemployed
The number of Americans out of work for 27+ weeks rose to 1.8 million in July, up 179,000 in a single month. Long-term unemployed now make up one-quarter of all jobless workers.
This group faces unique challenges: depleted savings, skill erosion, and reduced reemployment prospects. The study warns that without targeted support, long-term unemployment could become a structural drag on the economy.
Who’s Losing Their Jobs?
The study breaks down unemployment by demographics:
- Teenagers: The hardest hit, with unemployment spiking as they are often the “first fired” in downturns.
- Black workers: Disproportionately affected, reflecting systemic inequities.
- Women in retail and nonprofits: Overrepresented in sectors with the steepest job losses.
These disparities suggest that the burden of layoffs is not evenly shared, but concentrated among already vulnerable groups.
State-Level Stress
While the national rate is steady, state-level data tells a different story:
- California: Highest unemployment at 5.4%.
- South Dakota: Lowest at 1.8%.
- Mississippi: Largest year-over-year increase (+1.1%).
- Indiana: Largest decrease (–0.6%).
- New Jersey: 6th highest at 4.9%.
- New York: Mid-range at 4.0%, with only a modest 0.3% improvement.
The East and Southeast saw layoffs rise 220% year-over-year, underscoring regional vulnerability.
Corporate Collapses and Bankruptcies
The study notes that high-profile corporate failures are amplifying the crisis:
- Microsoft cut 9,000 jobs in its second round of 2025 layoffs.
- 23andMe, Del Monte, and At Home filed for bankruptcy, eliminating thousands of positions.
These examples show that even established brands are not immune to the volatility.
Legal Uncertainty
The study highlights legal risks tied to mass layoffs:
- WARN Act violations when companies fail to provide notice.
- Discrimination claims if layoffs disproportionately affect certain groups.
- Unlawful termination in cases of restructuring.
Workers may have legal recourse, but many are unaware of their rights.
The Broader Implications
The study concludes that the U.S. labor market is at a crossroads. While healthcare and social assistance added 73,000 jobs in July, these gains are not enough to offset losses elsewhere.
The paradox of a “stable” unemployment rate alongside record layoffs suggests that the metric no longer captures the true health of the labor market. For millions of workers—especially teens, Black Americans, and women in vulnerable sectors—the crisis is already here.
Conclusion
The Levine AND Wise study underscores that unemployment is not just an economic statistic but a human story. Behind the 4.2% national rate are millions of displaced workers, rising long-term unemployment, and widening demographic disparities.
Unless policymakers and employers confront these realities, the U.S. risks entrenching inequality and undermining its own economic resilience.
