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Editor's Note: This report is based on survey data from August 2024 that was published in September 2024. This is the most recent data available. (Source: Bureau of Labor Statistics)
The US unemployment rate average came down about one-tenth of a point last month, dropping from approximately 4.3% to 4.2%.
For context, the US unemployment rate hasn’t been above 4.3% since October of 2021, representing a tight labor market for an extended period of time seldom seen in US history outside of wartime.
Only 1 state saw its internal unemployment rate come down over the month, however, with Connecticut showing a 0.2% unemployment rate reduction, falling from 3.6% to 3.4%.
On the other hand, 7 ‘states’ - Georgia, Massachusetts, Minnesota, North Dakota, South Carolina, Utah, and Washington DC - recorded increases in their state unemployment rates, ranging from plus 0.1% to plus 0.4%. The number of states with climbing unemployment rates is down from 13 the month prior.
The more than 140 thousand new jobs added last month across the US as a whole resulted in 4 states with a net increase in payroll figures, while only 1 state - South Dakota - saw a net decrease in jobs, and the remainder were essentially unchanged.
Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for September 2024.
For the fourth straight month, Washington DC had the highest unemployment rate, jumping two-tenths of a point from 5.5% to 5.7%.
Nevada had the next highest unemployment rate, climbing from 5.4% to 5.5%.
California and Illinois were the only 2 other states that posted unemployment rates above 5%, at 5.3% each.
Washington State at 4.8% unemployment was the only other state above the US average, and the only other state above 4% for that matter.
South Carolina saw the largest increase in unemployment last month, spiking 0.4% from 3.9% to 4.3% unemployment, while Washington DC, Georgia, and Massachusetts each saw 0.2% increases in their respective unemployment rates, and 0.1% unemployment rate increases were recorded by Minnesota, North Dakota, and Utah.
Half of all states plus Washington DC recorded an increase in unemployment over the last 12 months - the largest increases going to Rhode Island, South Carolina, and Ohio, with 1.7%, 1.4%, and 1.0% increases, respectively.
For the 8th month in a row, South Dakota has recorded the lowest unemployment rate, holding steady at 2%.
Vermont has the next lowest unemployment rate at 2.2%, followed by North Dakota at 2.3% and New Hampshire at 2.6%. Mississippi and Nebraska are next at 2.7%; followed by Alabama and Maine at 2.8%; and Hawaii, Iowa, Maryland, and Wisconsin at 2.9% unemployment.
Only Connecticut saw its unemployment rate decrease over the month, dropping 0.2% from 3.6% unemployment to 3.4%.
Over the last 12 months, only 4 states have seen a net reduction in their unemployment rates, led by Arizona ( - 0.7%) and followed by Connecticut ( - 0.4%), Wisconsin ( - 0.4%), and Mississippi ( - 0.5%).
Despite having the lowest unemployment rate, or perhaps because it has consistently had the lowest unemployment rate among states throughout 2024, South Dakota was the only state to record a net decrease in jobs over the month, dropping a little more than 3 thousand and seeing in-state payrolls reduce by 0.7%.
No state recorded a net reduction in jobs over the course of the year.
Indiana, Minnesota, Texas, and Wisconsin all recorded net payroll increases last month.
Texas recorded the largest net gain both in terms of raw jobs figures and percentage gain, with the Texas labor force growing by 0.6% or almost 80 thousand jobs over the course of August.
Indiana tied Texas at 0.6% job growth and had the second largest number of raw jobs gains, netting almost 20 thousand.
Minnesota added a bit more than 14 thousand jobs for 0.5% growth and Wisconsin added a little less than 12 thousand jobs, accounting for 0.4% growth.
Over the course of the last year, Missouri and South Carolina have recorded the largest workforce growth rates at 3.3% each, followed by Montana at 3.1% and Alaska at 2.8%.
The states with the smallest job growth rates over the year are Massachusetts and New Jersey at 1.1% each, followed by Wisconsin at 1.2% and Iowa at 1.3%.
In terms of raw job figures, Texas has added just over 300 thousand net jobs over the last 12 months, while California added just under 290 thousand, Florida added just over 200 thousand, New York added 140 thousand, and Pennsylvania added a bit more than 100 thousand jobs.
The big economic story of the moment is the long-awaited interest rate cuts that finally arrived when the Federal Reserve reduced rates by half a percentage point last week, bringing baseline rates down to between 4.75% and 5%.
Further, the Fed is poised to lower interest rates by another half point over the remainder of 2024, and is on course to bring rates down by another percentage point over 2025, as well - assuming that inflation and employment trends hold.
While there are more than a few intervening events and trend shifts that might disrupt potential 2025 rate reductions, an additional half point cut in 2024 remains far more likely than not to occur at this point.
According to Fed projections, although inflation has yet to fall below the Fed’s stated target of 2%, we are expected to cross that threshold by 2026, and unemployment is forecast to climb slowly through 2025 before leveling out.
In sum, keep an eye out for more interest rate relief in the near-term, and maybe significant interest relief next year as well if expectations about our current economic trajectory hold. It has been a long time coming.
Looking for more exclusive content? Check out the Mployer Advisor blog.
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