Jobless Rate Drops Below 3% in 5 States

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The Bureau of Labor Statistics (BLS) has released its state employment figures for July. Five states had unemployment rates below 3%, against the national average of 4.2%.

Other than Hawaii, those states are in the center of the United States or the extreme northeast. Hawaii’s rate is 2.7%. The rate in New Hampshire is 2.8%, while adjacent Vermont has a rate of 3.1%. The rate in Nebraska is 2.8%, and it is 2.4% in nearby Colorado. In North and South Dakota, the rates are 2.2% and 3.1%, respectively. Most states with less than 3% unemployment are in regions where unemployment is low.

Notably, the states with the lowest unemployment rates have among the smallest populations. North Dakota ranks 48th, with a population of 723,000. New Hampshire is 42nd, with a population of 1.32 million. Hawaii is 40th with a population of 1.4 million, and Nebraska is 37th at 1.9 million. Colorado is the only state that does not fit the pattern. At 5.68 million, the state ranks 22nd in population.

While there appears to be a link between population size and unemployment rate, the reasons are not clear, other than the fact that a few very healthy industries in each state might skew the numbers.

The BLS comments about states and regions for July:

Unemployment rates were higher in July in 3 states, lower in 1 state, and stable in 46 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today (August 18). Twenty-seven states had jobless rate decreases from a year earlier and 23 states and the District had little or no change. The national unemployment rate, 4.3 percent, was little changed from June but was 0.6 percentage point lower than in July 2016.


North Dakota and Colorado had the lowest unemployment rates in July, 2.2 percent and 2.4 percent, respectively. The rates in North Dakota (2.2 percent) and Tennessee (3.4 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 7.0 percent. In total, 18 states had unemployment rates lower than the U.S. figure of 4.3 percent, 9 states and the District of Columbia had higher rates, and 23 states had rates that were not appreciably different from that of the nation.