Unemployment Climbs in August With Surprising Communities Leading the Way

For the last few months, the American Communities Project has noted that unemployment rates were rising across the country in many different kinds of communities — including places that are often more resilient in mild economic downturns.

The August data suggest that story goes on, with 10 of the 15 community types showing higher unemployment rates this August compared with August 2024. Three community types saw no change in their unemployment rates while two others saw declines.

When the analysis of the employment situation includes the number of people employed this August compared with August 2024, 11 of the 15 community types have seen either an increased unemployment rate or a decrease in people employed.

It’s possible to have a rising unemployment rate even with more people employed because the labor force can grow. A loss in the number of people who are employed can suggest a discouraged workforce. In August 2025, seven community types had fewer employed people than they did in 2024.

The patterns the ACP sees in the August numbers are like ones we saw in June. That is, the increases in unemployment don’t seem to follow the normal patterns around job losses. Places with higher incomes and more college degrees were just as likely to have a worse employment situation this August as rural places with fewer high-end jobs.

The Numbers

On the whole, the unemployment track in the county data from August does not look that different from the data in June. The national unemployment rate is up 0.1% again. At the community type level, many of the same places that saw increases in unemployment or decreases in the number of people working were the same.

The only difference in the figures came in the African American South, where the unemployment rate dropped and more people were employed in August 2025 compared with August 2024.

For these monthly analyses of county data, the ACP compares the latest data to the same month from the previous year. That’s because the county numbers are not “adjusted” to account for differences in industry hiring tied to seasonal changes.

Even with that caveat, there some signs in these numbers of a slowing economy.

Nationally, there were 268,000 more people working this August than in August 2024. But that increase is about half the increase we saw in the June data, which showed an additional 500,000 people employed in 2025 compared with 2024.

Perhaps more important, some of the unemployment increases at the community level were noticeably steeper than the national figure. In Hispanic Centers, LDS Enclaves, Native American Lands, and Rural Middle America, the increase was 0.2%. The Urban Suburbs saw an increase of 0.3%. And Graying America saw a 0.4% jump.

Bigger Meaning?

As we noted with the June data, this is a mix of places that is curious because of its spread. Some places are quite rural — such as Hispanic Centers, Rural Middle America, and Graying America — but the Urban Suburbs stand out.

The Urban Suburbs have the highest median household income of all the types in the ACP at about $90,000. Those 112 counties also have the population with the highest share of bachelor’s degrees.

Normally when the economy hits a bumpy patch of road the Urban Suburbs are less likely to feel the immediate effects than other places. The fact that they are among the leaders in unemployment increases in the last few measurements suggests something different about this current slowdown. The trend has not gone unnoticed and may be tied to cuts in government jobs and the adoption of AI.

To be clear, the Urban Suburbs are still doing well economically. Their unemployment rate is still below the national average of 4.5% for August, but the employment situation appears to be worsening relative to the national figure.

Also worth noting, Rural Middle America and Middle Suburbs both saw increases in unemployment and decreases in the number of people employed in these August numbers. Those two community types are the leaders in manufacturing employment in the ACP, and those labor figures suggest that sector of the economy is stalled.

That jibes with data from the Bureau of Labor Statistics that shows a decline in manufacturing jobs this year. It also suggests that, if the employment picture in those places doesn’t turn around in the next year, “jobs” are likely to be a theme in their congressional elections. Many voters in those communities voted for President Trump in 2024 due in part to a promise to brings jobs back.