Editor's Note: This report is based on survey data from June 2023 that was published in July 2023. This is the most recent data available. (Source: Bureau of Labor Statistics)
The national unemployment rate ticked down one-tenth of a point last month from 3.7% to 3.6%, but the real story remains the consistency of this average over time. In fact, the unemployment rate has hovered entirely within the range of 3.4% to 3.7% since February of 2022.
Similarly, for the second month in a row, 11 states saw reductions in their unemployment rates, led by Maryland at minus 0.4% followed by Washington state at minus 0.3%, while the remainder of states essentially saw no rate change.
Over the course of the last 12 months, 22 states saw their unemployment rates decrease, while 8 states plus Washington DC saw their unemployment rates grow, and the remainder were essentially unchanged.
And although a little more than 200 thousand jobs were added to US payrolls last month, only 5 states actually registered a net increase in their payroll figures, while 2 states saw a net loss of jobs within their borders and the remaining states held steady for the most part.
In the last year, 41 states have added jobs to their payrolls on balance, while the other 9 experienced no significant change.
Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for July 2023.
For the 5th month in a row, Nevada had the highest unemployment rate among states, registering at 5.4% for the third month in a row.
Washington DC had the next highest unemployment rate at 5% even (down from 5.1% the month prior), followed by California at 4.6% and Texas at 4.1%.
Notably, these 3 states and Washington DC were the only states with unemployment rates above the national average of 3.7%.
Over the last year, 8 states plus Washington DC have registered an increase in unemployment rate - California, Georgia, Kansas, Minnesota, Missouri, New Jersey, Texas, and Virginia.
South Dakota and New Hampshire jointly claimed the lowest unemployment rates among states for the second month in a row at 1.8%, down from 1.9% each the month before. This is South Dakota’s fourth consecutive month at the top of this list, whether the position is held solo or shared.
Nebraska and Vermont had the next lowest unemployment rates at 1.9%, which Nebraska maintained for the second month in a row.
Over the course of the last year, 22 states registered decreases in their rates of joblessness, led by Maryland at minus 1.2%, followed by Massachusetts at minus 1.1%. The next largest decreases in unemployment rate over the past 12 months were recorded by Arkansas, Mississippi, New Hampshire, and West Virginia, which each saw their unemployment rates drop 0.6% over the year - which is notably only half the unemployment rate reduction that Maryland clocked over the same time frame.
In June, Indiana reported a net loss of almost 14 thousand jobs (minus 0.4%) while Vermont lost a little over 4 thousand jobs on balance (minus 1.4%).
5 states saw a net increase in their payroll figures last month - Alabama, Alaska, New Mexico, New York, and Wyoming.
Unsurprisingly given its population, New York saw the largest increase in total jobs figures over the month, adding more than 28 thousand new jobs to its payrolls, followed by Alabama and New Mexico with more than 8 thousand and 7 thousand new jobs, respectively.
Alaska registered the largest percentage increase in jobs at 0.9%, followed by New Mexico and Wyoming at plus 0.7% over the month.
Over the last 12 months, Texas and Nevada have seen the largest percentage growth in the size of their workforces at plus 4% each.
The consistency that we’ve seen in these reports over the past year plus in terms of job growth and unemployment rate fluctuation has reflected historically strong economic performance in its own right, but what has been even more remarkable is that this consistency has been maintained despite sometimes rapidly changing external conditions, including inflation and interest rates.
With inflation having come way down at this point, hitting a year-over-year rate of just 3% between June of 2022 and June of 2023, the Fed’s interest rate hiking campaign over the last year plus is likely to take an extended pause in the near future and will hit its high-water mark for the current economic cycle within the next few months (if it hasn't already) assuming that inflation doesn’t flare back up again.
And while a majority of CEOs still predict a recession in the next year and a half, that has been the case for more than a year already, during which time many underlying conditions of concern have continued to improve, so even those predicting economic downturn expect it to be more mild and of shorter duration than they were previously anticipating.
The Fed will be meeting again next week, but even if another quarter point interest rate increase is announced - which is certainly possible but not a given - any rate increases we see over the next 12 months will amount to nearly nothing compared to the rate increases logged over the past year.
Whether or not we are in the midst of witnessing a well-executed soft landing remains an open question, of course, but it seems like a good sign that the horizon is looking sunnier even among those who maintain a gloomier disposition in general and/or predict gray skies in the near-term.
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