Editor's Note: This report is based on survey data from October 2022 that was published in November 2022. This is the most recent data available. (Source: Bureau of Labor Statistics)
The unemployment rate rose a bit last month (+ 0.2%) to 3.7% after levels reached 50-year lows in two of the three previous months. What’s more, there was a net gain in jobs with more than 260k new payroll entries created across U.S. businesses.
It is worth noting, however, that those gains seem to be accruing across fewer states, with only seven states seeing job growth last month, compared to the nine, 10, and 20 states that saw meaningful increases to active workforce numbers over the preceding three months, respectively.
Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for November 2022.
Washington, D.C. had the country’s highest unemployment rate last month at 4.8%, ticking back up 0.1%. Given that D.C. experienced an uncharacteristically steep drop in its unemployment rate the month prior (-0.4%), which put it closer to parity with the rest of the states than it had been for some time, this kind of correction is somewhat predictable.
Additionally, for the second month in a row, Illinois trailed D.C. with the second highest unemployment rate in the U.S., this time tying Nevada with 4.6% each. Nevada is trending in the wrong direction at the faster clip, however, with unemployment rate growth of 0.2% last month relative to Illinois’ 0.1% increase.
Washington, D.C. and 25 states were largely stable over the month in terms of unemployment rate movement, while 24 states shouldered the 0.1% uptick that was registered across the country as a whole.
The only state to claim an unemployment rate increase over the past year was Oklahoma at plus 0.5%.
Despite registering a 0.1% unemployment rate increase, Minnesota managed to claim the lowest unemployment in the U.S. for the fifth month in a row, albeit tied with Utah in this instance at 2.1%.
North Dakota and Vermont weren’t far behind at 2.3% each, which is essentially where both states were the month before, too.
Pennsylvania was the only state to see its unemployment rate fall last month (0.1%), while the largest year-to-year unemployment rate reductions were registered by California and New Jersey at 2.0% and 2.1%.
States with some of the biggest population centers were back on top for the second month in a row, with California adding almost 57k jobs, while Texas and Florida added about 50k and 36k, respectively.
Hawaii had the largest percentage increase in jobs at + 0.4%, followed by Colorado, Kansas, and Minnesota at +0.6% apiece.
Note that the seven aforementioned states are the only states that experienced a net increase in jobs last month, while D.C. and the remaining states saw no noteworthy change.
As noted in the opening paragraphs, the unemployment rate did tick up a bit but, when coming off historic lows, there’s really no other direction that it can reasonably be expected to go.
Because the Federal Reserve has been raising interest rates fairly aggressively, the fact that the unemployment rate has not climbed more under these conditions is what is most surprising.
Even with the trends moving in the wrong direction (in terms of the number of new jobs added and the breadth of their allocation among the various states), this resilience in the face of some headwinds–whether imposed by the Fed or as a result of market forces–is even more impressive.
What remains to be seen is whether these factors will culminate in the Fed-sought soft landing, which would enable the economy to avoid some of the worst-case outcomes in the event of downturn in the new year. Still, the labor market’s response to the current market conditions, to date, must be encouraging for those who believe a soft landing may still be in reach.
Looking for more exclusive content? Check out the Mployer Advisor blog, or review last month's market employment summary here.
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