By Alexis Whyte
HR departments in multinational companies need reliable intelligence on global labor markets to make critical decisions about staffing strategies in different countries and regions.
One of the primary criteria companies use to evaluate workforce potential in a country is the unemployment rate. But it is necessary to understand the context around unemployment rates to use the information for workforce planning. As such, HRO Today’s Global Labor Market Unemployment Report analyzes unemployment data and labor trends, as well as economic growth (GDP), forecasts, and other insights to provide a comprehensive view of labor markets and economies around the world.
Each quarter, this report examines the key events in the global economy and labor market and then reviews the top 10 global economies as well as the four major global regions of Northern America, Latin America, APAC (Asia-Pacific), and EMEA (Europe, Middle East, and Africa).
Key Findings for the Second Quarter of 2025
Economic growth is met with continued uncertainty, making growth predictions difficult. The global economy is still plagued by uncertainty, led by trade disputes, persistent inflation, and slowing consumer demand. The U.S.'s GDP contracted quarterly for the first time since 2022. Canada's economy contracted in the second quarter and is expected to contract throughout the rest of 2025. Conversely, the euro area experienced 2.5% GDP growth as investment and net exports picked up. Worldwide growth was upwardly revised by 0.2 percentage points to 3%, though this increase was primarily driven by emerging and developing economies.
The U.S.'s second quarter job growth was revised down, leading to the controversial firing of a labor executive. The U.S. Bureau of Labor Statistics (BLS) downgraded the total number of jobs added in May and June by more than 250,000. In a controversial move, President Trump fired BLS Commissioner Erika McEntarfer, though downward revisions have occurred during presidencies of both political parties and data is from third parties.
Youth unemployment is high in certain regions. Youth employment is key to future-proofing the labor force through advancing skills, providing experience, and boosting the economy through disposable spending. However, several major economies are struggling with historically high unemployment among youth, which includes recent college graduates. During a time of economic turbulence and uncertainty, redistributing resources to providing youth with employment is paramount.
United States and Canada
After contracting in the first quarter of the year, the United States economy grew by 3% in the second quarter, surpassing original estimates. Amid trade tensions, consumer spending and overall imports rebounded. Though this growth seems to be a sign of economic resiliency and recovery, common demand indicators, like final sales to private domestic purchasers and export levels, are weakening.
The U.S. labor market has persevered through economic uncertainty but seems to be slowing down. The number of active job listings decreased, signaling declines in labor needs. The U.S.'s BLS reported that 468,000 jobs were added throughout the second quarter, a decrease from jobs added last quarter. However, after revisions caused by delayed employer reporting and updated tax information, the BLS found only 19,000 jobs were added in May and 14,000 in June, lowering the number of jobs added in the quarter to just 210,000. This particular downward revision is the largest since the onset of the COVID-19 pandemic, resulting in President Trump firing the BLS Commissioner Erika McEntarfer. As of the publishing of this report, the BLS does not have a new commissioner.
After a promising first quarter, Canada's economy is expected to contract in the second and third quarters of 2025. In the second quarter, GDP contracted by 0.8%. Private investment again plummeted dramatically, creating uncertainty around future economic growth expectations. U.S.-imposed tariffs have impacted export levels, business investment, and household consumption and businesses and consumers hesitate to spend and invest long-term. Canada's unemployment rate continues to hover around 6.9% after peaking at 7% in May. The number of employed Canadians rose slightly in June, the first substantial increase since January.
Asia-Pacific (APAC)
Growth in the APAC region was downgraded from 4.4% to 3.9% amid trade tensions and tariffs. However, the region is experiencing boosts in cross-border investments, which is helping keep economic growth steady. In the second quarter of 2025, APAC received a 15% year-over-year increase in overall investment volume, led by Japan and South Korea. Though this is a positive sign for economic growth, APAC's labor market is not following suit. Originally predicted to grow by 1.9% in 2025, overall job creation in the region has been downgraded to 1.7%, fueled by uncertainty around trade demand.
Europe, Middle East, and Africa (EMEA)
Growth in the euro area was revised upwards from 0.8% throughout 2025 to 1%, boosted by investments and net exports. Ireland is fueling the region’s growth through pharmaceutical exports. After its recent economic contraction, Germany is expected to take fiscal stimulus measures soon. The European Union has not yet made a trade deal with the U.S. amid imposed tariffs, which can affect consumer demand and GDP growth in future quarters.
Unemployment in the EMEA region was relatively stable. Spain and Greece saw the largest decreases in unemployment rates, by 1.1 percentage points to 10.3% and 7.9%, respectively. Norway saw the largest increase in unemployment, by 1.0 percentage points to 5.4%, fueled by a spike in the number of youths available for work.
The U.K.'s labor market is beginning to slow. Unemployment in the second quarter increased by 0.2 percentage points to 4.7%. The number of employed people and the number of job vacancies decreased, possibly due to higher insurance contributions and payroll costs. Nominal wage growth is still at 6%, though annual wage growth has slowed considerably.
Latin America
Latin America's growth predictions for 2025 increased from 2% to 2.1%, though the region is still the slowest-growing worldwide. Inflation remains high, limiting monetary policy options. Mexico's economy has been especially affected by the US-imposed tariffs as its economy is particularly tied to US trade relations. However, the region's push to formalize jobs can lead to higher consumer spending and demand, helping strengthen their respective economies.
To view the entire report, visit https://www.hrotoday.com/research.