OECD Employment Outlook 2025: United States
Table of contents
These country notes provide an overview of the labour market situation in each country based on data from OECD Employment Outlook 2025. This edition has a special focus on how population and workforce ageing will affect the labour market and workers’ jobs.
The OECD unemployment rate remains at 4.9% in May 2025 – the same as one year ago. However, there are signs of weakening, with employment growth decelerating and labour market tightness falling back to pre‑COVID‑19 levels in many countries. Labour market tightness has returned to pre‑COVID‑19 levels in many OECD countries, as has the efficiency of matching between employers and jobseekers.
The United States labour market has remained resilient over the past year, though some signs of a possible slowdown are emerging. In June 2025, the unemployment rate stood at 4.1% – reflecting the historically low level of a year earlier. The labour force participation rate edged down by 0.3 percentage points to 62.3%, while the employment-to-population ratio declined by 0.4 percentage points to 59.7%, its lowest level since January 2022.
After one of the largest surges in the OECD, labour market tightness in the United States (measured by the number of vacancies per unemployed person) returned below its pre‑COVID‑19 level in Q4 2024 (1.1 vs. 1.2 in Q4 2019).
After expanding by a robust 2.8% in 2024, GDP growth in the United States is projected to slow to 1.6% in 2025 and 1.5% in 2026. The slowdown reflects rising import tariffs and retaliatory measures, high policy uncertainty, slower net immigration, and cuts to the federal workforce. The unemployment rate is expected to remain broadly stable, edging up slightly to 4.3% by 2026.
In April 2025, the new administration launched a review of the federal workforce development system, with findings due by late July. The review prioritises vocational training, apprenticeships, and technical education to better align programmes with the needs of skilled trades and high-demand sectors like advanced manufacturing and AI.
Real wages are growing in virtually all OECD countries, but in half of them, they are still below the levels of early 2021 – just before the inflation surge that followed the pandemic.
In the United States, nominal wages grew by 3.5% year-on-year in Q1 2025, leading to a 0.7% rise in real wages. Despite having recovered some ground, real wages remain 2% below their Q1 2021 level (See figure below).
Wage differences across sectors have narrowed in recent years, with low-pay sectors experiencing faster wage growth amid rising labour market tightness. Although the federal minimum wage has remained unchanged since 2009, state‑level increases have limited the fall in the real minimum wage weighted by employment to 2.2% between January 2021 and April 2025.
People around the world are living longer and healthier lives than ever before. This remarkable achievement has been accompanied by declining fertility, leading to significant demographic shifts. The number of old-age people per working-age person will rise by 67% by 2060 across the OECD. The share of people employed in the population will fall unless policies change, slowing down annual GDP per capita growth by 0.4 percentage points.
In the United States, the old-age dependency ratio increased from 19% in 1980 to 30% in 2023, in line with the OECD average. Looking ahead, the United States is expected to face a milder demographic headwind than many OECD countries, with the ratio projected to reach 45% by 2060, compared to the OECD average of 53%.
By 2060, the United States is projected to see a modest employment-to-population ratio decline of ‑0.4%, compared to the OECD average of ‑2% (See figure below), with limited implications for its GDP per capita growth which is expected to remain approximately constant.
Employment of both men and women drops sharply after age 60 in most countries. Promoting lifelong learning, healthy workplaces, flexible retirement, and inclusive employer practices is essential to boost older workers’ employability and extend working lives.
Employment gaps by age in the United States are significant, albeit smaller than in several other large OECD economies. Employment rates fall from about 80% for 45‑54 year‑olds to 57% at 60‑64 and 32% at 65‑69, a 48‑point drop – narrower than the 51‑point average OECD decline (from 80% to 29%) (See figure below). The gender employment gap among workers aged 55 to 64 is about ‑11 percentage points in the United States, in line with the OECD average, but greater than in some other large economies, including Canada, France, Germany and the United Kingdom.
In the United States, the effective retirement age is 0.7 years below the normal retirement age, leaving room to improve older workers’ employability and opportunities to extend working lives without adjustments to the statutory retirement age.
Federal and state initiatives are increasingly promoting skill-based hiring, encouraging employers to prioritise competencies over formal qualifications. Changes in public hiring and support for skills-first training can expand job opportunities for mid-career and older workers by recognising their experience and reducing barriers for those without degrees. This approach can help value older workers’ transferable skills and broaden access to quality employment.
Contact
Stefano SCARPETTA (✉ stefano.scarpetta@oecd.org)
Andrea SALVATORI (✉ andrea.salvatori@oecd.org)
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.
This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
The full book is available in English: OECD (2025), OECD Employment Outlook 2025: Can We Get Through the Demographic Crunch?, OECD Publishing, Paris, https://doi.org/10.1787/194a947b-en.
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