Economic Indicators | Jobs and Unemployment

State Employment and Unemployment Data Show Signs of Improvement, but We Have a Long Way to Go

State employment and unemployment data released today by the Bureau of Labor Statistics showed something of a mixed bag: positive signs for some states and lingering weakness in others. The unemployment rate has been on a slow and steady decline over the last year in most states, although in some cases, this may be due to workers dropping out of the labor force rather than finding jobs. Job growth over the last year has been consistent and moderately strong in nearly all states. This is welcome news—however, 25 states still have still not made up all of the jobs they lost in the Great Recession, and even those that have reached pre-recession employment levels should have been adding considerably more jobs in order to keep up with growth in the working-age population.

From July 2014 to October 2014, 43 states and the District of Columbia added jobs, with Wyoming (+1.5 percent), Alabama (+1.3 percent) and North Dakota (+1.2 percent) seeing the largest percentage gains. On the other hand, Montana, Nevada, Virginia, Rhode Island, Michigan, and New Hampshire have all lost jobs since July.

Over the same time period, the unemployment rate has fallen in 31 states, with Kentucky (-1.2 percentage points), Colorado (-1.0 percentage points), Idaho (-0.7 percentage points), and Alabama (-0.7 percentage points) experiencing the largest decreases. However, because the unemployment rate only measures those who are actively seeking work, this is not the whole story of the labor market in these states. It is possible that the decreasing unemployment rate may be caused by workers leaving the labor market because job opportunities are weak. This is particularly pronounced in Kentucky, where the labor force shrank by 1.9 percent since July 2014, despite the fact that Kentucky’s working age population has grown 0.2 percent over that time.

However, not all news is bad, as many states saw declines in unemployment that appear to be for the right reasons. Since July 2014, 15 states have experienced a decline in the unemployment rate while also adding jobs and seeing an expanding labor force. This is the kind of unemployment declines and job growth states need to see more consistently to get us to a full recovery.

Unemployment rates rose in 12 states and the District of Columbia over the last three months, with South Carolina (+0.9 percentage points), Louisiana (+0.8 percentage points), and Vermont (+0.7 percentage points) seeing the largest increases. 7 states saw no change in their unemployment rate.

Today’s numbers inspire a little more confidence in the state of our economy, but are also a reminder that we have a long way to go until we are back to full labor market health.

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