Today’s release of state employment and unemployment data from the Bureau of Labor told the same story we’ve heard for most of the year: consistent, albeit uninspired job growth in most states, and unemployment rates that were largely unchanged. And even where unemployment is falling, it is often for the wrong reason—unemployed workers giving up the job search rather than finding new jobs. As of September, 26 states and the District of Columbia have more jobs than they had prior to the recession, yet with population growth over that time, we should have added considerably more. Only four states (Minnesota, North Dakota, Ohio, and Vermont) have reached their pre-recession unemployment rate.
From June to September, 46 states and the District of Columbia added jobs, with New Mexico (+1.1 percent), North Carolina (+1.1 percent), and North Dakota (+1.1 percent) experiencing the largest percentage growth. Maryland (-0.3 percent), Pennsylvania (-0.2 percent), and Vermont (-0.1 percent) lost jobs, while South Dakota experienced no measurable change.
Over the same period, the unemployment rate fell in 23 states. Colorado (-0.8 percentage points), Kentucky (-0.7 percentage points), and Illinois (-0.5 percentage points) had the largest declines in unemployment; however, some of these declines are likely due to unemployed individuals giving up the job search, as the labor force shrank in all three of these states. Kentucky’s reduction was particularly acute, with its labor force shrinking by 2.4 percent—the largest such decline in the country. In fact, the East South Central Census division, where Kentucky is located, is the only division to experience a labor force decline over the past year. Its pool of workers and active job-seekers has shrunk by 1.7 percent despite 0.7 percent growth in the working-age population.
Unemployment rates rose in 24 states and the District of Columbia, with South Carolina (+1.3 percentage points), Louisiana (+1.0 percentage points), and Vermont (+1.0 percentage points) experiencing the largest increases. Of the 24 states with increases in unemployment, only 6 (Delaware, Iowa, Louisiana, Massachusetts, Oregon, and South Carolina) experienced labor force growth in excess of their working-age population growth—meaning that most of the increases in unemployment were likely not due to previously discouraged job-seekers restarting their job search.
This should serve as a reminder that the unemployment rate does not tell the whole story, and in fact, the gap between the official unemployment rate and what it would be if missing workers were included in the tally may be growing. Until there are stronger signals of improvement in the labor market, policymakers should use every tool at their disposal—even indirect ones—to put more people back to work.