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Editor's Note: This report is based on survey data from May 2024 that was published in June 2024. This is the most recent data available. (Source: Bureau of Labor Statistics)
Despite the fact that US employers added 272 thousand jobs last month, which was almost 50% above the predicted number of job additions, those gains were essentially spread across 7 states and Washington DC.
As the national unemployment rate ticked up by one-tenth of a point to 4% for the first time in more than 2 years, ending the longest streak of unemployment levels sustained below 4% since a substantial portion of the US workforce were serving in Vietnam, 4 states actually saw their unemployment rates go down last month while only 3 states reported an unemployment rate increase.
In total, 5 states plus Washington DC have unemployment rates above the national average of 4% while 24 states have unemployment rates that are below the national average, while the remainder are essentially in line with the US figure.
Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for June 2024.
Washington DC had the highest unemployment rate last month at 5.3%, which is up slightly from the 5.2% unemployment DC recorded the month before.
After 3 straight months with the highest unemployment rate, California had the second highest unemployment rate last month at 5.2%, which is down one-tenth of a point from the month before, followed by Nevada at 5.1% and Washington state at 4.9%, neither of which saw any meaningful change over the month.
Last month, only 3 states saw their unemployment rates climb - Ohio (plus 0.2%), Kansas (plus 0.1%), and Massachusetts (plus 0.1%).
Over the last 12 months, 34 states in total have seen their unemployment rates increase, led by Rhode Island at plus 1.7%, Washington state at plus 1.1%, and Connecticut at plus 1%.
North Dakota and South Dakota have had the lowest unemployment rates for 5 months in a row, holding steady at 2% as of the latest report.
Vermont had the next lowest unemployment rate last month at 2.1%, followed by Nebraska and New Hampshire at 2.5%, each.
Last month, 4 states recorded a decrease in unemployment rate, led by Arizona at minus 0.2%, followed by California, Maine, and Virginia at minus 0.1% apiece.
Over the last year, only Arizona and Maryland have recorded net reductions in their unemployment rates, both dropping 0.3%.
No states saw statistically significant job losses last month/year.
In total, 8 states recorded a net increase in jobs over the month.
California added the most jobs in terms of raw numbers with a net increase of almost 44 thousand, followed by Texas at just under 42 thousand net jobs, and Ohio at about 21 thousand.
In terms of percentage job growth, Idaho led the way at plus 0.9%, followed by Washington DC at plus 0.6%, and New Jersey, Ohio, and Washington state at plus 0.4% each.
Over the last year, Texas, Florida, and California added the largest number of net jobs, while the biggest percentage gains went to Alaska, South Carolina, New Jersey, and Idaho which all saw their payrolls increase by more than 3%.
Inflation continued to fall last month, and expectations for this Friday’s inflation update are quite promising, specifically with regard to the metrics that the Federal Reserve favors.
As a result, many economists and Fed-watchers believe that the odds of an interest rate cut before the end of 2024 are creeping up again.
Given some of the inflationary resurgence we’ve seen in recent months, however, even though those spikes were small and short-lived, the Fed probably won’t be cutting rates when they next meet toward the end of July, even if the forthcoming report is as positive as expected.
Perhaps worse, additional inflationary pressure from increased shipping costs may become a bigger problem before the Fed gets another opportunity to cut rates before year’s end.
Shipping cost increases as a result of pandemic-related supply chain issues were a significant driver of inflation in 2021 and 2022, and those costs are now 5 times higher than they were last year, in part due to military conflict centering on Russia/Ukraine and Israel/Palestine causing shipping traffic from Asia to Europe to reroute all the way around Africa.
Further, there is a current shortage of shipping vessels relative to the demand for their services and the holiday shopping surge is primed to become more impactful beginning in just a couple months.
While the current shipping rates in 2022 and 2023 were still about twice as expensive as they are now, the resulting inflation may very well be enough to encourage the Fed to keep the rates where they currently are for the remainder of the year nonetheless.
Plenty of new cargo ships are apparently being built to address the heightened demand, which will help release some of the inflationary pressure that is currently building up, but even a great inflation report later this week may not be enough to see rates come down in the near future.
As always, we will check back in as more data becomes available.
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