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Editor's Note: This report is based on survey data from May 2023 that was published in June 2023. This is the most recent data available. (Source: Bureau of Labor Statistics)
Despite the national unemployment rate ticking up by three tenths of a point to 3.7% after posting a half-century low 3.4% the month before, 11 states actually saw a net decrease in their unemployment rates while the remaining states saw no significant change. In effect, the increase in unemployment was distributed relatively evenly among a majority of the states, limiting the impact on any state to non-significant levels.
Over the course of the last year, about half of all states saw little to no change in their unemployment rates. Of the remaining half, about two-thirds saw a decrease in unemployment rate whereas about one-third had their unemployment rate go up.
And although nearly 340 thousand new jobs were added, only 5 states registered a meaningful increase in their payroll figures while the remaining 45 states and Washington DC were largely stable, continuing the trend of stability that has characterized the last few months with regard to these metrics.
Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for June 2023.
Nevada hit its fourth straight month as the state with the highest unemployment rate, holding steady at 5.4% and pausing the downward trend it had been experiencing of late.
While last month Nevada had been the only state with an unemployment rate in excess of 5%, Washington DC has now joined Nevada above the 5% unemployment threshold at a rounded 5.1%.
Over the course of the past 12 months, the states with the largest increases in unemployment rate were California, Minnesota, and DC with half a point increase each; followed by Missouri, Kansas, and Virginia at plus 0.4%; then Georgia, Iowa, and Texas, which each added 0.3% to their respective unemployment rates through the last year.
South Dakota maintained an unemployment rate of 1.9% for the second consecutive month and has now claimed the lowest unemployment rate in the country for the third month in a row. This time, however, South Dakota is joined at 1.9% unemployment by New Hampshire and North Dakota, which saw their respective unemployment rates fall by 0.1% and 0.2% last month.
11 states saw their unemployment rates decrease over the month, led by Massachusetts, Oregon, and Vermont at minus 0.3% each, followed by Hawaii, New Hampshire, Virginia, Washington, and Wyoming which each saw their unemployment rates fall by 0.2%.
In total, 17 states have seen their net unemployment rate decrease over the last year, with Massachusetts out in front at minus 0.9%, followed by Maryland at minus 0.7%, then Arkansas, Mississippi, and Wisconsin, which each dropped half a point from their unemployment rates over the past 12 months.
No states reported statistically significant job losses last month.
5 states saw a net increase in their payroll figures last month - California, Michigan, New York, Texas, and Utah.
The largest raw job additions unsurprisingly went to the population centers, with Texas and California each adding about 50 thousand jobs while New York added about 30 thousand.
Utah had the largest percentage increase in jobs, adding half a point, followed by Texas at plus 0.4%, while California, Michigan, and New York each increased the number of jobs in their respective states by 0.3% each.
While the banner headlines drawn from these employment reports often feature the unemployment rate - which book-ended the first four months of 2023 with the lowest monthly unemployment rates measured in the US since the late 1960 - in many ways the consistent, expectation-exceeding growth in the job market may be the more impressive stat.
The job growth trajectory is all the more impressive in the face of not only considerable inflation at times but also the interest rate hikes that the Federal Reserve has been similarly consistent in issuing since the spring of 2022.
At its most recent meeting earlier this week, however, the Fed elected not to raise the interest rate again for the moment, perhaps a reflection of the fact that inflation has now dropped to just 4% over the past 12 month period.
Still, a majority of forecasters predict that the Fed will go ahead and raise rates by another quarter point when they reconvene in July, so the present pause is likely temporary, but if we are perhaps finally approaching the soft landing that the Fed has been steering toward, the operative question may soon become ‘when are the current rates coming back down?’
To that point, Fed Chairman Jerome Powell predicts we are still a couple years away from the time when inflation will have been sufficiently contained so as to incite the Fed to begin lowering interest rates again. Economic downturn in the interim may change that timeline calculation, of course, but in that case the Fed will likely be glad to have some cushion in the interest rates to work with in the first place.
As always, this is a space worth keeping an eye on in the meantime.
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