Americans aged between 25- to-34-year-olds have the highest unemployment rate among large developed countries, according to reports.
The labor department says this is the only age group with lower average wages in early 2013 than in 2000.
"This is still a very big puzzle," Lawrence Katz, a Harvard professor and former chief economist at the Labor Department told The New York Times Monday. He called the acute downturn in youth employment "the million-dollar question" for the economy.
Despite Europe's own troubled economies, the situation is worse in the United States. In 2011 the United States had a youth unemployment rate of 26.2 percent compared to 20.5 percent in Germany, 21.6 percent in Britain and 22 percent in France. The nation also trails Canada, Japan, Australia, Russia and Sweden.
According to the report, economists say a number of factors may be behind the lack of jobs for the young. For one, employers are reluctant to add new jobs, and there have been fewer start-ups.
Overall, the United States has been producing less college graduates, a significant criteria affecting employment in a service-based economy. And the United States appears to be doing less than other countries to counsel, retrain and help the jobless find work, with fewer opportunities for parental leave and part-time work.