Unemployment Rate by State in US 2025 | Statistics & Facts

Unemployment Rate by State in America 2025

Understanding unemployment trends across the United States remains a critical measure for evaluating regional economic health and workforce stability. The labor market landscape in America during 2025 presents a complex picture, with significant variations appearing across different states and territories. While the national unemployment rate stands at 4.3 percent as of August 2025 according to the U.S. Bureau of Labor Statistics, individual states experience markedly different employment conditions based on their unique economic structures, industry concentrations, and demographic characteristics.

State-level unemployment data reveals compelling disparities that reflect the diverse economic conditions prevailing across the nation. From the District of Columbia’s elevated 6.0 percent to South Dakota’s remarkably low 1.9 percent unemployment rate, the range of jobless rates spans more than four percentage points. These variations underscore how regional factors including local industry mix, workforce skills, population migration patterns, and state economic policies create distinct labor market outcomes. Examining these state-by-state differences provides valuable insights into which regions are experiencing robust job growth and which face ongoing employment challenges in the current economic environment.

Interesting Facts About Unemployment Rate by State in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August-September 2025

The August 2025 unemployment statistics present a fascinating snapshot of America’s labor market health. The remarkable spread between the lowest and highest state unemployment rates demonstrates how regional economic conditions can vary dramatically within a single nation. The District of Columbia’s 6.0 percent rate represents unique challenges faced by the nation’s capital, including structural employment issues and a concentrated government workforce that has experienced significant downsizing. Conversely, South Dakota’s achievement of maintaining the nation’s lowest jobless rate at just 1.9 percent reflects strong local economic fundamentals and robust labor demand in the state.

The data reveals that only 3 states and the District of Columbia exceeded the national rate of 4.3 percent, suggesting that most regions have experienced relatively favorable employment conditions. Meanwhile, 22 states successfully maintained unemployment rates below the national average, indicating healthy labor markets with strong job creation and retention. The year-over-year comparisons provide particularly valuable insights, with Oregon’s 0.8 percentage point increase representing the largest deterioration in state labor market conditions, while Indiana’s 0.8 percentage point decrease demonstrates the most significant improvement among all states during this period.

Complete Unemployment Rate Rankings by State in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2025 (Seasonally Adjusted)

This comprehensive state ranking demonstrates the substantial geographic variation in unemployment conditions throughout the United States in 2025. The data clearly shows that 6 jurisdictions experienced unemployment rates exceeding 5.0 percent, indicating labor market challenges that merit attention from economic development officials and workforce development programs. Leading this group, the District of Columbia at 6.0 percent and California at 5.5 percent face particularly acute employment challenges that reflect both structural economic issues and cyclical factors affecting their regional economies.

The middle tier of states, with unemployment rates between 3.0 and 4.3 percent, represents the majority of the nation and includes diverse economic regions from the industrial Midwest to the growing Sun Belt. States in this range generally experience balanced labor markets with manageable unemployment levels that neither constrain business growth through severe labor shortages nor indicate widespread joblessness. The lower tier, consisting of 10 states with rates below 3.0 percent—led by South Dakota at 1.9 percent, North Dakota and Vermont both at 2.5 percent—have successfully maintained near-full employment conditions despite broader economic headwinds affecting other regions, reflecting exceptionally tight labor markets with strong employer demand for workers.

Highest Unemployment Rate States in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2025

The states experiencing the highest unemployment rates in 2025 face distinct economic challenges that contribute to elevated jobless levels. The District of Columbia’s 6.0 percent unemployment rate stands significantly above the national average, primarily driven by substantial federal government workforce reductions and organizational restructuring within numerous agencies. This elevated rate reflects the capital’s heavy reliance on government employment, making it particularly vulnerable to federal budget cuts and efficiency initiatives that have reduced headcount across multiple departments and agencies.

California’s 5.5 percent unemployment rate represents ongoing adjustments within the state’s technology sector, where major companies have implemented significant layoffs and hiring freezes throughout 2024 and into 2025. The Golden State’s large and diverse economy continues grappling with challenges including high costs of doing business, regulatory compliance burdens, and companies relocating operations to other states. Similarly, Nevada’s 5.3 percent rate reflects persistent challenges in the tourism and hospitality sectors, which remain central to the state’s economy but have experienced slower recovery patterns and changing consumer behaviors post-pandemic. Michigan’s 5.2 percent demonstrates ongoing transitions in automotive manufacturing as the industry shifts toward electric vehicles, requiring workforce retraining and creating temporary displacement as traditional manufacturing roles evolve.

Lowest Unemployment Rate States in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2025

States achieving the lowest unemployment rates in America during 2025 demonstrate exceptional labor market strength and economic vitality. South Dakota’s remarkable 1.9 percent unemployment rate represents the tightest labor market in the entire nation, reflecting the state’s diverse economic base spanning agriculture, financial services, tourism, and light manufacturing. This exceptionally low rate indicates businesses in South Dakota face significant challenges recruiting workers, with labor demand substantially exceeding available supply—a situation that typically drives wage growth and may constrain business expansion plans.

North Dakota and Vermont both at 2.5 percent showcase how different economic models can achieve similar employment success. North Dakota benefits from energy production activities, particularly in the Bakken shale formation, along with strong agricultural sectors that provide stable employment across rural communities. Vermont’s success stems from a combination of robust tourism throughout all seasons, specialized manufacturing operations, and a highly educated workforce attracted to the state’s quality of life. Hawaii’s 2.7 percent rate reflects the islands’ tourism sector recovery following pandemic disruptions, combined with substantial military presence that provides stable government employment. These low-unemployment states consistently demonstrate that diversified economies, skilled workforces, and business-friendly policies create conditions conducive to maximum employment levels.

Year-Over-Year Unemployment Rate Increases by State in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2024-2025 Comparison

The 17 states and District of Columbia experiencing year-over-year unemployment rate increases from August 2024 to August 2025 reveal concerning labor market deterioration across diverse regions. Oregon’s 0.8 percentage point increase—the largest among all states—represents significant economic challenges, particularly within the technology sector where major employers have implemented substantial layoffs, and the timber industry which continues facing reduced demand and operational challenges. This deterioration moves Oregon from a relatively healthy 4.2 percent to a concerning 5.0 percent, placing the state among those with the highest unemployment burdens nationally.

Virginia’s notable 0.7 percentage point increase from 2.9 percent to 3.6 percent reflects the ripple effects of federal government workforce reductions impacting the state’s substantial population of federal employees and contractors, particularly concentrated in Northern Virginia’s Washington suburbs. Similarly, the District of Columbia’s 0.7 point rise to 6.0 percent directly correlates with federal agency downsizing and efficiency initiatives. The six states experiencing 0.6 percentage point increases—Connecticut, Delaware, Massachusetts, Mississippi, Ohio, and Iowa—represent geographically diverse regions facing varying challenges including manufacturing sector adjustments, financial services reorganizations, and agricultural economy volatility. These increases signal weakening labor demand, slower job creation, or expanding labor forces that have outpaced employment growth across these states.

Year-Over-Year Unemployment Rate Decreases by State in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2024-2025 Comparison

The 9 states experiencing year-over-year unemployment rate decreases demonstrate successful economic development strategies and favorable business conditions that have strengthened local labor markets. Indiana’s impressive 0.8 percentage point decline—the largest improvement among all states—reflects robust job creation in advanced manufacturing, particularly automotive production and related supply chains, along with significant logistics and distribution sector expansion capitalizing on the state’s central geographic location. This improvement moves Indiana from 4.4 percent down to 3.6 percent, transforming the state’s labor market from slightly concerning to solidly healthy.

Illinois’ substantial 0.6 percentage point decrease from 5.0 percent to 4.4 percent represents meaningful progress for a state that has historically faced economic headwinds including population outmigration and business relocations to neighboring states. This improvement suggests strengthening conditions in Chicago’s diverse economy and more stable employment across downstate regions. Kentucky’s 0.5 point decline reflects continued success in attracting automotive manufacturing investments and related supplier facilities, building on the state’s strategic positioning within the automotive supply chain. Nevada’s 0.4 point improvement to 5.3 percent—while still elevated—indicates gradual tourism and hospitality sector recovery, though the state continues facing challenges compared to its pre-pandemic employment levels. These declining unemployment rates signal stronger employer confidence, accelerating hiring activity, and improving prospects for job seekers across these states.

Monthly Unemployment Rate Changes by State in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, July-August 2025 Comparison

The month-over-month changes from July to August 2025 reveal limited volatility across most states, with only 5 states experiencing statistically significant changes in their unemployment rates during this single-month period. This relative stability suggests that labor market conditions have largely plateaued during the summer months, with neither dramatic improvements nor significant deteriorations occurring across most regions. The limited number of states showing significant monthly changes indicates that 45 states and the District of Columbia maintained stable unemployment rates between these two months, reflecting established employment patterns rather than sudden shifts in labor market dynamics.

Colorado’s 0.3 percentage point decrease from 4.5 percent to 4.2 percent represents the most positive monthly development, potentially reflecting seasonal employment gains in tourism, outdoor recreation, or other summer-intensive industries within the state’s diversified economy. Alabama’s modest 0.1 point decline to 2.9 percent further solidifies the state’s position among the lowest unemployment jurisdictions nationally. Conversely, the three states experiencing increases—Delaware and Maryland both up 0.2 points, and Minnesota up 0.1 point—face somewhat softening labor market conditions, though these changes remain relatively minor and may reflect normal monthly fluctuations rather than sustained deterioration trends. The minimal month-to-month volatility across most states suggests the national labor market has reached a relatively stable equilibrium during mid-2025.

Regional Unemployment Patterns in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2025 (Regional averages calculated from state data)

The regional unemployment patterns across the United States in 2025 reveal significant geographic variations that reflect fundamental differences in economic structures, industry concentrations, and workforce characteristics. The Southeast region demonstrates the strongest labor market performance with an average unemployment rate of 3.6 percent, substantially below the national average. This regional strength reflects successful economic development efforts that have attracted advanced manufacturing facilities, particularly in automotive production, aerospace manufacturing, and related supply chains, combined with robust tourism sectors in states like Florida and Tennessee that provide substantial employment opportunities.

The Pacific region faces the most challenging labor market conditions with an average rate of 5.1 percent, driven primarily by California’s elevated 5.5 percent and Oregon’s 5.0 percent unemployment rates. This region’s concentration in technology industries—which have experienced significant workforce reductions through layoffs and hiring freezes—creates vulnerability to sector-specific downturns. The Northeast region at 4.3 percent mirrors the national average, reflecting diverse economic conditions ranging from New York’s recovering urban economy to Vermont’s tight rural labor market. The Midwest’s 4.0 percent demonstrates relative resilience despite ongoing manufacturing sector transformations, while the Southwest’s 4.5 percent reflects mixed conditions across energy-dependent economies. These regional patterns underscore how geography, industry composition, and local economic policies create distinctly different employment outcomes across America’s diverse regions.

States with Full Employment Conditions in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2025

The 10 states operating under full employment conditions in 2025—defined as unemployment rates below 3.0 percent—face unique economic challenges related to exceptionally tight labor markets. South Dakota’s 1.9 percent rate represents the most extreme labor shortage in the nation, where available workers are scarce and employers must compete aggressively for talent through higher wages, enhanced benefits, and improved working conditions. This extraordinarily low unemployment level suggests that virtually everyone seeking employment in South Dakota can readily find jobs, creating significant constraints for businesses attempting to expand operations or fill vacant positions.

States with unemployment rates between 2.5 and 3.1 percent—including North Dakota, Vermont, Hawaii, Alabama, Montana, Nebraska, New Hampshire, Oklahoma, and Wisconsin—similarly experience conditions where labor demand substantially exceeds supply. These tight labor markets typically generate positive outcomes for workers, including wage growth, improved bargaining power, and enhanced job security, but create operational challenges for employers who struggle to maintain adequate staffing levels. Businesses in these states often resort to creative recruitment strategies including hiring bonuses, flexible scheduling, remote work options, and increased automation investments to address persistent labor shortages. The sustained full employment conditions across these states reflect strong local economies, favorable business climates, and demographic patterns where workforce growth lags behind employment expansion.

States Requiring Labor Market Intervention in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2025

States experiencing unemployment rates exceeding the national average by substantial margins require focused workforce development interventions and economic revitalization strategies. The District of Columbia’s critical status at 6.0 percent—a full 1.7 percentage points above the national average—demands immediate attention from policymakers and economic development officials. The capital’s elevated unemployment reflects structural challenges stemming from federal workforce reductions that have eliminated thousands of government positions and reduced demand for contractors and service providers supporting federal agencies.

California’s 5.5 percent rate represents a significant challenge for the nation’s most populous state, where 1.2 points above the national average indicates substantial labor market slack despite the state’s massive and diverse economy. The Golden State’s elevated unemployment stems from multiple factors including technology sector workforce reductions, high costs of living that have prompted both business and population outmigration to other states, and regulatory environments that some employers find challenging. Nevada, New Mexico, and Michigan—all exceeding 5.0 percent—similarly face elevated unemployment requiring targeted interventions such as workforce retraining programs, business attraction incentives, and industry diversification strategies. These states would benefit from comprehensive approaches including expanded vocational education, partnerships between educational institutions and employers, infrastructure investments supporting business development, and policies encouraging entrepreneurship and small business formation to absorb unemployed workers into productive employment.

Nonfarm Payroll Employment Growth by State in the US 2025

Data Source: U.S. Bureau of Labor Statistics, State Employment and Unemployment Summary, August 2024-2025 Comparison

The U.S. labor market in 2025 shows steady job expansion across several major states, reflecting ongoing economic resilience. Texas leads the nation with an estimated 195,600 new jobs between August 2024 and August 2025, supported by strong growth in technology, energy, and business services. New York and Pennsylvania also show meaningful employment gains, adding 125,100 and 101,200 jobs respectively, marking a positive trend for both state economies. States including Florida, North Carolina, and Ohio similarly experienced job growth above 75,000 positions, demonstrating continued strength in sectors like hospitality, manufacturing, and healthcare.

Some states with smaller populations are seeing disproportionately high labor force improvements. South Carolina recorded one of the fastest growth rates at +3.1%, driven by expanding manufacturing and logistics hubs. Utah (+1.7%) and North Carolina (+1.6%) also show robust performance as businesses invest in regional development and workforce expansion. Even states posting modest increases—such as Virginia, Michigan, and Missouri—reflect ongoing workforce recovery and gradual improvements in labor demand. Overall, the data suggests stable economic momentum heading into 2025, with positive job creation spread widely across the country.

Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.

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