Editor's Note: This report is based on survey data from September 2022 that was published in October 2022. This is the most recent data available. (Source: Bureau of Labor Statistics)

The unemployment rate ticked down by 0.1% last month, returning to 3.5% and marking a 50-year unemployment rate low for the second time in three months.Historic and record-breaking performance aside, taking a closer look at the state-by-state figures reveals a picture of stability. Although the 12 states (including Washington, D.C.) that registered a month-to-month unemployment rate reduction outpaced the nine states that saw higher unemployment numbers last month, the remaining 30 were mostly stable and saw no appreciable difference from the month before. In terms of the addition of new jobs to U.S. payrolls, however, nine states saw significant increases to their workforce, whereas only one state saw a net decrease in total in-state jobs and the other 40 states were essentially unchanged. Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for October 2022.

States With the Highest Unemployment Rates

Washington, D.C. was once again the ‘state’ with the highest unemployment rate. What is less common, however, was D.C.’s significant unemployment rate reduction last month, dropping 0.4% from 5.1% to 4.7%– a drop that is four times larger than the 0.1% reduction D.C. reported the month prior. As such, this month’s performance puts the district much more on par with states on the upper end of the unemployment rate range.

Meanwhile, Illinois had the second-highest unemployment rate last month at 4.5%. On top of D.C. and Illinois, another seven states had unemployment rates above the national average: Alaska, California, Michigan, Nevada, New York, Pennsylvania, and Texas, all of which boasted unemployment rates from 4% to 4.4%.  

States With the Lowest Unemployment Rates

For the fourth straight month, Minnesota claims the lowest unemployment rate among states at 2%, followed closely by Utah and Vermont at 2.1% each.

It is worth noting, however, that despite recent dominance in the lowest unemployment category, Minnesota’s unemployment rate ticked back up 0.1% each of the past two months. Still, at these levels, trending upward is the only realistic direction for the unemployment rate to go, so some pendulum swing in that direction is unsurprising.  

In total, 14 other states also registered unemployment rates below the national average of 3.5%: Alabama, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, New Hampshire, North Dakota, South Dakota, and Virginia, with rates ranging from 2.2% to 2.9%.

States With New Job Gains

After briefly ceding the title of state with the most jobs gains to Kentucky last month, the major population centers were back on top, with Florida leading the charge by adding almost 50K new jobs to in-state payrolls.  

Texas and North Carolina registered the second and third largest number of new jobs, with about 40K and 17K, respectively.Despite losing the crown for the largest number of jobs added, Kentucky still topped the list of states with the highest percentage jobs increase. Kentucky ties New Hampshire at +0.8%, followed by Florida, Nebraska, and West Virginia at +0.5% apiece. Three other states saw net increases in the total number of in-state jobs as well, including Massachusetts, North Carolina, and Tennessee; each saw 0.4% job growth last month.

States With New Job Losses

Only Delaware posted a net in-state payroll reduction, losing 2,900 jobs last month (-0.6%) and dropping their total number of jobs to 461,200. The number of jobs in most states (40 in total) remained stable.  

Mployer Advisor’s Take  

The labor market has continued to remain strong and stable even amid growing concerns about a potential economic downturn on the horizon. This resilience has been so significant that many economic prognosticators have begun raising the prospect that the labor market may remain in considerably better shape than it has during past economic contractions. Still, despite evidence indicating that factors like continuing supply chain issues, inflated corporate profits, and war in Europe are largely driving global inflation, the Federal Reserve continues to view domestic inflation as a nail for which the hammer of increasing interest rates is their best (if not only) tool for the job. At some point, those borrowing costs are going to have a larger impact on the ability of businesses to continue hiring at their current rates, at which point the labor market will have to soften to some degree, and the number of new jobs added each month will drop.  

The bigger question is whether the cost of living and consumer goods pricing will come down, as well. Looking for more exclusive content? Check out the Mployer Advisor blog, or review last month's market employment summary here. If you would like more specific market summary data, click here to learn more about Mployer Advisor's monthly Market Employment Summary report.

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