The unemployment rate in August was near a four decade low at 3.7%. It is, at this point in time, the culmination of one of the most profound, rapid changes in the job rates in recent memory. Prior to the pandemic, in February 2020, the rate was 3.5%. That rose to 14.7% in April last year. Nationwide, the rate was 3.7% in August 2022, which means most jobs lost over the two plus years have been replaced.
The unemployment rates vary considerably from state to state and the District of Columbia. The DC rate was the highest at 5.1% in August, which is 38% of the national average.
The BLS has just released its STATE EMPLOYMENT AND UNEMPLOYMENT — AUGUST 2022 . Very few states posted changes compared with the previous month. “Nonfarm payroll employment increased in 10 states, decreased in 1 state, and was essentially unchanged in 39 states and the District of Columbia in August 2022.”
DC’s rate was followed by New York where the jobless rate in August was the second highest in the nation. The state had a jobless rate in the month of 4.5%. In each case, historically these numbers should still be considered low.
At the other end of the spectrum, states with the lowest jobless rate tended to be in the Plains states and Northeast. The lowest rate was in Minnesota at 1.9%. The rate in Nebraska and Vermont was 2.1% and in 2% in Utah and New Hampshire. Many states had their lowest jobless rate in the history of the state unemployment report.
Low unemployment rate is a double edged sword. A job market with so few people out of work means that the consumer population in America is at or near all-time high. This means millions of more consumers than the economy had in early 2020. These consumers drive spending, which drives GDP, which drives unprecedented demand for products and services.
The answer to the question of how inflation can be brought under control is higher interest rates according to most economists and central banks which includes the Fed. This, in turn, tightens many business margins. And, tightened business margins often lead to layoffs. Famous economist and former Treasury Secretary Larry Summers believes the jobless rate may need to reach 7.5% for inflation to be under control
In the meantime, very few people are out of work in DC despite the 5.1% rate. The figure is 19,786 against a labor force of 385,040. It will take a huge spike in the jobless rates to push this raw number up much.
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