While unemployment in the U.S. has been well below 4% for many months, which is low by historical standards, there are several American cities where the figure is less than half of that. In three metros, the jobless rate was 1.7% in August, which, while it may seem impossible, has several explanations. The most extraordinary fact about these cities, however, is that virtually everyone has a job and this situation will not change soon.
The BLS releases a monthly report on city unemployment. The latest version is “METROPOLITAN AREA EMPLOYMENT AND UNEMPLOYMENT — AUGUST 2022”. The national jobless rate was 3.8% during the month. This national rate has been on a long roller coaster ride due to the COVID-19 pandemic. The unemployment rate in February 2020 was 3.5%, a multi-decade low. The virus pushed that to 14.7% in April 2020. The economy lost 20.5 million jobs in two months. It has taken until last month for these job losses to be recovered.
The August metro report shows that the job recovery continues. Among the 389 metro areas measured, unemployment rates improved in 384 compared to the same month last year. Ninety metro areas have unemployment rates below 3%. The only city which still has a deeply troubled labor market is Yuma, AZ where the jobless rate was 21%. It sits in one of the most drought-plagued parts of America, which is a primary reason for its trouble.
Three cities had jobless rates of 1.7%, the lowest in the nation in August. There were Burlington-South Burlington, VT; Fargo, ND-MN; and Mankato-North Mankato, MN. Fargo and Mankato are fairly close to one another. Fargo is on the ND border with MN. Mankato is just south of Minneapolis. It is probably a coincidence, but all three cities are in the northernmost parts of the country (of course, without considering Alaska).
To get a sense of how many people in these cities are actually out of work, 1,053 people were unemployed in Mankato in August. That is out of a civilian labor force of 60,176. These roughly 1,000 people may simply be between jobs.
Mankato demonstrates how a city can have virtually full employment. Among its largest employers are local and state governments, which tend to be a stable source of jobs. Additionally, two well established companies with long histories in the area employ a significant number of people. In this case, they are the Mayo Clinic and Walmart.
These three cities not only have a low jobless rate but they also have an employment situation where enough jobs are in the hands of highly staple parts of the economy and where the employment picture is not likely to change.
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