The unemployment rate is the most important and widely recognised way to measure the economy’s health and performance.
It’s one of the first indicators that shows if our economy is slowing down and if prices continue to inflate, and it provides some hints about how much people are going to be spending.
Many things influence the unemployment rate, including how many people are working or looking for jobs, the number of available jobs, and how many people are being laid off.
Ironically, according to the U.S. Bureau of Labour Statistics, the District of Columbia has a 5.8% unemployment rate in the U.S. In contrast, South Dakota is ranked in first place with the lowest unemployment rate of 1.8%.
In this article, we’ll examine the top 10 US states with the greatest unemployment rates and what might be contributing to these numbers.
List of US states with the Highest Unemployment Rate
According to the latest dataset provided by the U.S. Bureau of Labour Statistics, here are the top 10 US states with the lowest employment rates.
| Rank | State/District | Unemployment Rate |
| 51 | District of Columbia | 5.8% |
| 50 | Nevada | 5.6% |
| 49 | Michigan | 5.5% |
| 48 | California | 5.3% |
| 47 | Kentucky | 5.2% |
| 45 | Rhode Island | 4.9% |
| 45 | Ohio | 4.9% |
| 42 | Colorado | 4.8% |
| 42 | Illinois | 4.8% |
| 42 | New Jersey | 4.8% |
| 40 | Alaska | 4.7% |
| 40 | Oregon | 4.7% |
| 39 | Massachusetts | 4.6% |
| 37 | Louisiana | 4.4% |
| 37 | Washington | 4.4% |
| 36 | New Mexico | 4.3% |
| 34 | New York | 4.2% |
| 34 | South Carolina | 4.2% |
| 32 | Arizona | 4.1% |
| 32 | Texas | 4.1% |
1. District of Columbia (5.8%)
Source: Desertcart INDIA
The District of Columbia consistently ranks among the highest for unemployment, currently at 5.8%. While it boasts a highly educated workforce primarily in the federal government and professional services, a significant portion of its population faces challenges due to lower education levels or limited job training. This creates a notable mismatch between available jobs and the skills of a segment of the workforce.
Despite a high labour force participation rate of 72.4% in March, indicating many people are actively seeking work, the job market isn't absorbing everyone, contributing to its leading unemployment figure.
2. Nevada (5.6%)
Source: Freepik
Nevada's economy is heavily reliant on the tourism and hospitality sectors, making it particularly vulnerable to economic fluctuations. At 5.6%, its unemployment rate remains one of the nation's highest. This rate, which saw a 0.5 percentage point annual change, underscores the sensitivity of its job market to shifts in travel and leisure spending.
3. Michigan (5.5%)
Source: Britannica
Michigan's unemployment rate, currently at 5.5%, reflects its historical ties to the automotive and manufacturing industries. While these sectors are vital, they are also prone to cyclical downturns, automation, and shifts in production, leading to job displacement. The state experienced a significant over-the-year increase in its unemployment rate by 1.1 percentage points, indicating a challenging period for its labour market.
4. California (5.3%)
Source: Britannica
California, with its vast population and diverse economy, has an unemployment rate of 5.3%. While it is a centre for technology, entertainment, and agriculture, its sheer size means that medium unemployment rates result in a large number of affected individuals.
The state has seen an increase of 0.3% in its unemployment rate compared to the previous year. Factors such as high life costs, recent sorting in technical fields and ongoing adjustment in various industries contribute to its advanced unemployment data.
5. Kentucky (5.2%)
Source: Kentucky
The unemployment rate of Kentucky is 5.2%. The state's economy is diverse but still greatly affected by construction, especially in the motor vehicle and aerospace industries, and historically by coal mining, which has seen a long-term decline. While these sectors provide adequate employment, they are susceptible to global economic changes and technological progress that can cause job losses.
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6. Rhode Island (4.9%)
Source: The Flag Factory
The unemployment rate of Rhode Island is 4.9%, especially affected by a significant over-the-year growth of 1.4 percentage points. As a small state, its economy is sensitive to regional economic trends and changes in its traditional industries, such as manufacturing and services.
While efforts are made to diversify, the state job market may experience more obvious effects than an economic recession or structural changes in major areas, which can lead to relatively higher unemployment rates than the national average.
7. Ohio (4.9%)
Source: New Washington Ohio
Ohio's unemployment rate is 4.9%, with a significant increase of 0.9 percentage points. The state has a strong manufacturing base, which is facing challenges from automation and global competition, despite the benefits of recent jobs in some areas, which contributes to job displacement.
8. Colorado (4.8%)
Source: Britannica
The unemployment rate of Colorado is 4.8%, which shows a higher increase of 0.7 percentage points. While its strong technology is known for tourism and external entertainment industries, rapid population growth has sometimes surpassed employment creation in some areas. Additionally, unemployment can increase with economic recession or specific industry adjustments.
9. Illinois (4.8%)
Source: Vecteezy
Illinois, with a 4.8% unemployment rate, has seen an increase of 0.6 percentage points compared to the previous year. The state, especially in the Chicago Metropolitan region, has a diverse economy but has faced challenges in manufacturing and some corporate transfers. Fiscal issues within the state can also affect business confidence and investment, potentially slowing up job growth.
10. New Jersey (4.8%)
Source: Britannica
New Jersey's unemployment rate stands at 4.8%. The state faces a high cost of living, which can influence labour force dynamics. Its economy relies on sectors like pharmaceuticals, finance, and transportation. While these industries are generally stable, job growth in New Jersey has sometimes lagged behind its population growth and the national average.
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What U.S. States Have the Lowest Unemployment Rates?
South Dakota is ranked in first place on the list of the highest unemployment rates, with the lowest unemployment rate, at a mere 1.8%. This exceptionally low figure indicates a very robust and healthy job market where virtually anyone seeking employment can find it.
What is the US State Unemployment Rate?
The District of Columbia currently has the highest unemployment rate in the U.S. at 5.8%. The state is followed by Nevada (5.6%), Michigan (5.5%), California (5.3%), Kentucky (5.2%), and Rhode Island (4.9%).
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