States see record low unemployment across the U.S.

Across much of the country, the jobs market is as strong as it’s ever been, and Black women, young people, and people with disabilities are among the workers benefiting, recent U.S. Bureau of Labor Statistics data show.

Twenty states reported an unemployment rate under 3% in April, while 15 states saw record lows, led by South Dakota at 1.9%, followed by Nebraska at 2%, and New Hampshire and North Dakota at 2.1%. The national rate was 3.4%. Other states that saw their unemployment rates reach levels not seen since the BLS began recording them in 1976 include Alabama, Arkansas, Kentucky, Maryland, Maine, Montana, Ohio, Pennsylvania, and Wisconsin, according to BLS data released on Friday.

Virginia unemployment

According to Bureau of Labor Statistics data, Virginia’s unemployment rate dropped to 3.1% in April, a slight decrease from its March rate and below the national rate of 3.4%. A May 19 press release from Gov. Glenn Youngkin’s office also noted the state recorded its highest labor force participation rate since June 2014 in April, at 66.2%.

“The Virginia labor market continues to show strength during the first part of 2023,” said Secretary of Commerce and Trade Caren Merrick. “Despite large gains in labor force participation, filling open positions remains a challenge for businesses in the commonwealth, and we remain laserfocused on getting more Virginians into the workforce.”

Recent data from the Virginia Employment Commission also found there was just under one unemployed worker for every two job openings in Virginia in March 2023 — a measurement known as the “job seekers ratio.” That ratio has held steady since July 2021.

Mark Vitner, the chief economist at Piedmont Crescent Capital in Charlotte, North Carolina, said major metropolitan areas and emerging metropolitan areas in the South have benefited from recent shifts in the labor market. In Florida, the labor market in Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa, and Jacksonville has been growing rapidly, he said.

“Huntsville, Alabama, is one of the fastest growing markets, and it’s a big tech market in aerospace and in defense. We’ve seen a huge influx from California into Huntsville, and Chattanooga, Tennessee, has seen an influx of investment in the automotive industry,” he said. “The Port of Savannah has been the fastest-growing port in the country. It’s just fueled enormous growth in the industrial market in Savannah and, more broadly, in south Georgia. These markets have low unemployment rates and very strong job growth, and so that’s what you want to see that mix of.”

Vitner added that the rural areas of states with low unemployment may have a different story to tell.

“States that have a larger rural population tend to have lower labor force participation, and given the stronger overall job growth, it results in some very low unemployment rates without particularly strong nonfarm employment,” Vitner said.

To be sure, in some states, the number of people who have lost work has increased. Ten states had rates of 4% or higher than the nation. Nevada, which had the highest unemployment rate in the country in 2020, has seen job gains but still had the nation’s highest rate in April, at 5.4%. States like Washington and California, which have seen large layoffs among tech companies, also have seen their job markets slightly worsen.

But the recovery has also lifted up workers often sidelined in worse economic times. Bureau of Labor Statistics data on the demographics of workers and their unemployment rates for April showed that employment among Black women climbed to a 22-year high. Women’s labor force participation is also moving up. It increased by 0.6 of a percentage point in the past year.

That growth is affecting women of all ages and education levels, and Black women and Hispanic women have had some of the biggest labor force participation growth, at a 2.2% and 2.1% increase over the same period, according to an analysis from the University of Michigan’s Betsey Stevenson, a professor of economics, and Benny Docter, a senior policy analyst.

The unemployment rate for people with disabilities, while still high compared to the overall unemployment rate, is 6.3% compared to 8.3% a year ago. In March, the unemployment rate for people aged 16 to 24, who are already benefiting from pre-pandemic labor market conditions, marked a 70-year low at 7.5%, according to the Economic Policy Institute. In April, it dipped further for that age group to 6.5%.

“What happens when the economy is strong is that you can bring marginalized groups of workers off of the sidelines because employers are more open to different folks essentially,” said Katherine Gallagher Robbins, a senior fellow at the National Partnership for Women & Families. “Part of the consequence of this strong labor market is that you’re seeing low unemployment rates for Black workers, and in particular Black women and for disabled workers. The rates for disabled workers have been both in terms of unemployment, but also in terms of participation, really strong compared to what we have seen in years gone by.”

Gallagher Robbins added that Gen Z workers came into a very strong labor market, which bodes better for them than previous generations, but it also means they have more to lose if the economy falters soon.

“They’re hopefully in a position of setting themselves up for lifelong higher earnings, and yet they will be amongst the first to go. They tend to work in industries where there’s more churn,” she said, such as retail and hospitality.

Many industries are also showing fast job growth right now, Docter said, and growth has been largest in education and health care.

Private sector education and health services “had been the strongest job grower through the time between the last recession and 2020, and it got knocked pretty far off course in a way that was pretty atypical. Since then, we’ve seen really steady, really impressive growth most months (in those areas), and I expect that we still will for a while,” he said. “It’s nowhere near its pre-pandemic trajectory, so there’d be over 700,000 more jobs in that industry today than there are. And so there’s a lot of space there to grow if you look at the numbers this month. … There’s nothing really to say that those industries are going to falter any time soon.”

The labor market is still leaning toward greater power for workers as well, which has been positive for labor organizers, Gallagher Robbins said. Americans’ approval of labor unions has increased from 64% before the pandemic to 71% in 2022.

“[Worker bargaining] is on the rise and not accidentally. … Not everything has been successful, but those [organizing efforts] coming to the fore now, I think, are no coincidence,” she said. “That is also something that is interacting and intersecting with the economy of the moment, and if we shift back towards a place where workers have less bargaining power, I think that that’s going to have an impact on the ability to organize.”

Vitner said the retirement of Baby Boomers provides many workers with greater labor power than they previously enjoyed.

“Workers clearly have more negotiating power today. One of the things that’s in their favor is that we have a rising tide of Baby Boomers that are leaving the workforce. And that makes for a very tight labor market, and certain industries have even greater challenges because their workforce skews a bit older,” he said. “Younger workers have a bit more negotiating power, but they have a brighter outlook. They’re entering the workforce at a time where there’s going to be opportunities to advance relatively quickly.”

Inflation has made it more difficult for many workers to enjoy these gains, but that could be changing. Although inflation is still far above the Federal Reserve’s 2% target, it is moderating, and wages are now outpacing inflation, at a 6.1% increase in median weekly earnings for January, February, and March compared to a year before. During the same period, there was a 5.8% rise in consumer prices. In April, average hourly earnings rose by 4.4% over the past 12 months.