The unemployment gap between skilled and unskilled workers has been shrinking.

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Data: Federal Reserve Bank of St. Louis; Chart: Harry Stevens/Axios

Overall unemployment rose to 3.9% in December as more would-be workers — including those with less education — entered the workforce.

  • The unemployment rate for those 25 and older without a high school diploma is holding near historic lows, while unemployment hit 3.8% in December for those with a high school diploma — higher than November, but still close to the lowest rate we've seen in decades.

What to watch: The recovery is consistently helping less-educated workers find jobs, but cracks are beginning to show in industries like manufacturing, which are likely to hire them. Per the latest reading of the ISM manufacturing index, manufacturing activity slowed to a two-year low, thanks to softening demand.

In November, unemployment dropped for those without a high school diploma and high school dropouts, and it edged higher for people who were more educated.

What's going on: Job growth has been faster in low wage industries and slower in high wage industries, giving a boost to less skilled workers, William Spriggs, AFL-CIO's chief economist, points out.

  • The tightest labor market since 1969 is forcing companies to consider workers they may have overlooked when the unemployed pool provided more options. The forgotten job seekers — with lower levels of education — are benefiting from companies' hunger for labor, as Axios Future Editor Steve LeVine notes.
  • Walt Disney and Yum Brands, for instance, are offering upfront college tuition for their less-educated employees, "reversing the norm that requires workers to get the degree before launching a career," the Wall Street Journal reports.

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