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Editor's Note: This report is based on survey data from July 2023 that was published in August 2023. This is the most recent data available. (Source: Bureau of Labor Statistics)
The adjusted unemployment rate in the US, which has fluctuated between 3.4% and 3.7% since early 2022, essentially held steady at 3.5% last month
In total, 7 states saw their unemployment rates reduce over the course of the month, which is down from 11 states the month before as the job market cools a bit. Pennsylvania saw the largest drop at minus 0.3%, followed by Louisiana, Maryland, Virginia, and Washington state at minus 0.2% each, and Massachusetts and Vermont at minus 0.1%.
Arizona and Wisconsin actually registered small increases in their unemployment rates of 0.1% apiece, while the remaining states were stable for the most part.
Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for August 2023.
For half a year now, Nevada has been at the top of the list of states with the highest unemployment rates, though its rate has dropped by a tenth of a percentage point over the last month, going from 5.4% to 5.3% as of the most recent data.
Besides Washington DC at 5%, only 2 states other than Nevada had unemployment rates higher than the national average - California at 4.6% and Texas at 4.1%.
In the last 12 months, 5 states plus Washington DC saw an increase in unemployment, led by DC at plus 0.9%, California at 0.8%, and New Jersey at 0.7%.
New Hampshire separated itself from the crowd and once again claimed sole ownership of the lowest unemployment rate in the country, down a tenth of a point to 1. 7%, followed by Maryland and Vermont at 1.8% apiece, then South Dakota, which had tied New Hampshire at the top of the list last month, now at 1.9%.
20 states in total registered unemployment rates lower than the national average.
Over the previous 12 months, 23 states saw their unemployment rates go down, led by Maryland at minus 1.4%, followed by Massachusetts at minus 1.2%.
No states reported statistically significant job losses last month.
Payrolls increased on net in 4 states last month, while the remaining 46 states plus Washington DC saw little changed. Florida gained about 45 thousand jobs, Indiana added about 14 thousand jobs, Hawaii reported about 5 thousand new jobs, and Vermont saw the employment ranks of in-state companies climb by about plus 3 thousand.
In terms of relative growth, however, Vermont actually saw the biggest total increase at plus 0.9%, followed by Hawaii at plus 0.8%, Florida at plus 0.5%, and Indiana at plus 0.4%.
In the last 12 months, Nevada has registered the largest percentage increase at plus 3.8%, followed by Texas at plus 3.3%, and Florida at plus 3.2%, while Texas, California, and Florida saw the largest number of jobs added in terms of raw figures, with their payroll additions ranging from about 300 thousand to about 450 thousand over the year.
Consistency remains one of the underlying themes in these reports, even as the job market finally starts cooling as intended by the Federal Reserve through its interest rate hiking campaign, which it has been implementing pretty consistently for almost a year and a half now.
After a brief reprieve during June, the Federal Reserve Board of Governors resumed that campaign at the end of July with another quarter point rate hike.
The softening of the labor market coincides with inflation of 3.2% over the last 12 months, which is looking much better than it had been through much of the last year, despite ticking back up last month by about two-tenths of a point.
With that 3.2% inflation figure still above the Fed’s previously declared target of 2% and moving in the wrong direction even if ever so slightly, it remains a very real possibility that another quarter point rate hike is in store when the Fed meets again next month, which is a possibility that Fed Chairman Jerome Powell indicated was very much on the table when announcing last month’s rate hike.
Still, with rates already above anything we’ve seen in the US in more than 2 decades, however, there is plenty of reason to believe that another pause to the larger rate-hiking campaign will be in order before the Fed then moves on to determining whether another hike is merited in either or both of the two final meetings of the calendar year, set to conclude at beginning of November and in the middle of December, respectively.
In the meantime, albeit subject to change, economic signals continue lining up in favor of the Fed’s sought-after soft landing in which inflation is tamped out without necessitating, or inducing for that matter, recession.
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