BACKGROUND: One of the major problems of youth is unemployment, affecting youth from all walks of life in this modern era. Unemployment (mainly as an urban phenomenon) and underemployment continue to be serious social problems in Ethiopia despite some improvements in recent years. With around 50 per cent of the urban men between age 15 and 30 unemployed, Ethiopia has one of the highest unemployment rates worldwide .Clearly some young people are more vulnerable than others, but in many ways a period of unemployment has become a normal part of the transition from school to work. While youth unemployment has been well researched, the majority of studies have focused on those living in urban areas. This paper describes the nature of unemployment among young men in urban Ethiopia. AIMS: To determine the causes of unemployment, affecting Socio-economic of condition of youth in Gondar town, a case of Azezo Demaza Kebele (Block) in Ethiopia. METHOD: the primary data was collected from unemployed youth in Gondar town, a case of Azezo Demaza Kebele (Block) in Ethiopia. Random sampling techniques were employed in the study for data collection. The sample constitutes 50 individuals from that locality. RESULTS: The study reveals that the majority of youth (82 percent) search for job from 1 to 4 years..During the long period of searching of job, unemployment increase the related problem also extended. According to the assessed data 78 per cent of the total respondents pass their time by chewing chat smoking cigarette, drinking alcoholic beverages and other related activities.69.23 percent of respondents are users of drugs on result of unemployment. The Labor market institutions that govern employment relations in Ethiopia are generally found to be weak. This weakness is characterized by limitation of legal framework and lack of social dialogue among institutions. CONCLUSIONS: Despite the recent encourage economic growth in Ethiopia, unemployment is high and remains to be one of the socio economic problems in the country. In Ethiopia, there have been significant increases in educational attainment; however, there has not been as much job creation to provide employment opportunities to the newly educated job seekers. There is a need to improve labor productivity of the employees in the sector by aligning formal education programs to the practical skill needs of the country.