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Editor's Note: This report is based on survey data from November 2023 that was published in December 2023. This is the most recent data available. (Source: Bureau of Labor Statistics)
While the US employment rate fell by a couple tenths of a point down to 3.7% last month, that reduction was spread so thinly across the country that no single state saw a meaningful reduction in its unemployment rate.
In effect, 38 states plus Washington DC saw their unemployment rates hold essentially steady, while 12 states actually registered an increase in unemployment statewide.
In total, 19 states have a lower unemployment rate than the US average of 3.7%, while 5 states and Washington DC have higher unemployment rates, and the remaining 26 states are essentially tied with the national average.
Over the last year, 20 states have seen their jobless rates fall, while 15 states saw no meaningful change in unemployment over the year, and the remaining 15 states plus Washington DC saw their unemployment rates rise higher than where they were at this time last year.
Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for December 2023.
Nevada and Washington DC continue to be the only ‘states’ with unemployment rates of 5% or higher - at 5.4% and 5.0%, respectively. Neither state’s unemployment rate saw any movement over the last month.
California (4.9%), Illinois( 4.7%), New Jersey (4.7%), and New York (4.3%) were the only other states that had unemployment rates above the US average of 3.7%.
Unemployment rates were generally more stable last month than the month prior, with 7 states reporting an unemployment rate increase of 0.2% (Arkansas, Maine, Montana, New Hampshire, Tennessee, Virginia, Washington), while 5 states saw an unemployment rate increase of 0.1% (Alabama, California, Massachusetts, Oklahoma, and Vermont).
20 states in total currently have unemployment rates that are higher than they were a year ago, led by New Jersey at plus 1.4%, followed by California and Washington DC, both at plus 0.8%.
Maryland recorded the lowest unemployment rate in the US for the fourth straight month despite ticking up one-tenth of a point to 1.8%.
After Maryland, Nebraska came in at 1.9%, South Dakota at 2.0%, Vermont at 2.1%, Nebraska at 2.3%, and Alabama at 2.4%, followed by Florida, Hawaii, Kansas, Massachusetts, Rhode Island, and Virginia, all at 2.9%.
No states saw a reduction in its unemployment rate over the month, but 20 states have seen an unemployment rate reduction over the past year, led by Maryland at minus 1.3%, followed by Oregon at minus 1.2%, and Pennsylvania and Vermont, which both saw their unemployment rates drop by 1% in the last 12 months.
No states saw statistically significant job losses last month.
Despite earlier economic reports indicating that nearly 200 thousand jobs were added last month, only 3 states saw significant gains in their payroll entries, amounting to only about one quarter of the total number of jobs initially reported - Florida with about 31 thousand new jobs, Alabama with about 13 thousand new jobs, and Maine with about 4 thousand new jobs added last month.
Alabama and Maine’s job additions both equate to a percentage increase of 0.6% while the new jobs in Florida amount to an increase of 0.3%.
Over the past 12 months, 28 states in total have seen meaningful growth in jobs figures, but only 3 states have seen their payroll figures increase by 3% or more during that time - Nevada at plus 3.5%, Idaho at plus 3.1%, and Texas at plus 3.0%.
Following Texas in annual growth as a percentage, Wyoming came in at 2.9%, then Florida at 2.8%, South Carolina at 2.7%, Kentucky at 2.6%, South Dakota at 2.5%, New Mexico at 2.2%, and Georgia, North Carolina, Pennsylvania, and Utah at 3.1% each.
Mployer's Take:
For three consecutive meetings, the Federal Reserve has chosen not to raise interest rates.
Further, the Fed has signaled that it intends to reduce interest rates 3 times next year assuming that current trends and forecasts come to fruition, which is a strong testament to the confidence they have that inflation is under control despite still hovering around a point above their 2% target.
The markets have been at or approaching record highs for nearly 2 months in a row, consumer spending is rising, mortgage rates are falling, and the Fed’s soft landing - in which inflation is reined in without causing a recession - seems as likely as ever.
While the possibility of some degree of economic downturn in 2024 still seems probable if for no other reason than an economy this strong is impossible to sustain indefinitely, the duration and severity of any downturn we experience in the short term is looking to be shorter and less intense with seemingly each new economic report.
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