How has the U.S. unemployment rate changed after the summer?

The Bureau of Labor Statistics (BLS) will release the September Employment Report on Friday, October 4. This report will provide the final details on how unemployment has shifted over the summer months in the United States.

The August report released this month estimated the national unemployment rate to be 4.2 percent. This was down 0.1 percent from July and represents the second-highest figure since October 2021.

In May, the unemployment rate rose to 4 percent and has fluctuated slightly about that level throughout the summer. The September report will be critical in understanding how the labor market fluctuated throughout the warmer months. Unemployment tends to fall slightly during the summer as vacations are typically planned, which can spur hiring in hospitality and other travel-related industries. However, with inflation continuing to push up prices (though at a much slower rate than seen over the last two years), that additional summer boom in employment may not have been seen as families scaled down their vacations this year.

A look at unemployment benefit claims

Aside from the unemployment rate, another data point that we can examine to understand changes in employment are unemployment insurance claims made throughout the country. In June, continued claims, meaning workers claiming benefits for more than one week, began to grow, rising from 1,791,000 in late May to 1,856,000 a month later in late June before hitting a recent high of 1,871,000 at the end of July. In August, continued claims began to fall, but as of the week of September 7, the number has not fallen to levels seen in May, currently hovering around 1,829,000.

Are layoffs increasing?

The BLS releases a monthly report called “Job Openings and Labor Turnover (JOLTS) Summary,” which also runs a month behind the current period. The most recent report, covering conditions in August, found that around 1,762,000 people were laid off, the highest figure since early 2023. However, compared to pre-pandemic levels, these layoffs are not outside of the average seen. The August JOLTS report will be critical in understanding if layoffs continue to trend upward, which could be a major concern for economists who worry that the current economic conditions regarding employment indicate that a recession is brewing.

Unemployment forecasts for the remainder of 2025

The Federal Reserve has noted that unemployment has increased as a result of their shift in monetary policy to hike the federal funds rate over the last two years. Now, as unemployment surpasses four percent, the central bank says they do not want to see any additional increases in unemployment. Thus, at their meeting in mid-September, Chair Jerome Powell announced that the Federal Open Market Committee agreed to reduce the federal funds rate by fifty basis points, or half a percent.

Nevertheless, the Committee’s economic forecasts estimate that the median unemployment rate for 2024 will be 4.4 percent, rising to 4.5 percent in 2025. In other words, the central bank expects unemployment to continue rising throughout the year since no rates at that level have been reported, making it impossible to form the median.