List of U.S. States by Unemployment Rate, Check Here!

U.S. States by Unemployment Rate: The Bureau of Labor Statistics (BLS) publishes monthly and annual figures via its Local Area Unemployment Statistics (LAUS) programme. As of August 2025, the U.S. average unemployment rate stood at approximately 4.3%, according to reports from USA Facts. Moreover, according to the Bureau of Labor Statistics, South Dakota had the lowest unemployment rate (1.9 %) and the District of Columbia had the highest (6.0 %).

In this article, you will learn what the unemployment rate by state looks like, who is most affected, when the data is collected, where in the US rates are highest and lowest, why the differences exist, and how the rates have evolved. 

Which State Has the Highest Unemployment Rate?

The District of Columbia recorded the highest unemployment rate at 6.0% and surpassed all U.S. states. Among the states, California had one of the highest rates at 5.5%, which is followed closely by Nevada at 5.4%. Therefore, these elevated figures highlight the economic challenges in these regions. 

Which States Have the Lowest Unemployment Rates?

South Dakota has the lowest unemployment rate at 1.9%, indicating a robust job market. Whereas, North Dakota and Vermont tied with a rate of 2.5%, while Hawaii followed with 2.7%. Other states with notably low unemployment rates include Alabama and Montana at 2.9%.

List of U.S. States by Unemployment Rate 

The table below shows a few extremes from the most recent BLS data, which keeps changing seasonally.  In total, 22 states had jobless rates lower than the U.S. average (~4.3 %) in August 2025, and only three states with DC exceeded it.

(Source: Bureau of Labor Statistics)

What is the Unemployment Rate by State by Year?

After looking at the past decade, the state unemployment rates have fluctuated with national cycles of growth and recession. The BLS also provides historical highs and lows per state for reference. Some points:

• States dominated by volatile industries (e.g. energy, tourism) tend to see larger swings.

• Many states’ rates move in step with the national unemployment rate, though local factors (industry closures, population shifts) can cause divergence.

• Over long spans, even states near the bottom (low unemployment) may experience occasional spikes.

What Is a Healthy Unemployment Rate?

A healthy unemployment rate typically ranges between 3% and 5%. Rates below 3% may indicate a tight labour market, potentially leading to inflationary pressures. Conversely, rates above 5% can signal economic distress and underutilisation of the workforce.

Why Do States Differ So Much?

A few reasons why unemployment rates vary across the states:

• Economic base and industry mix: States heavily reliant on a single sector (e.g. oil, agriculture, tourism) are more vulnerable to downturns.

• Population growth & migration: Inflows of job seekers can temporarily raise unemployment.

• Policy, training and education: States with more active job-training, education, or business incentives often maintain lower rates.

• Labour force participation: Some states have higher proportions of people not in the labour force (retirees, discouraged workers), which can influence rates.

Why does this matter? By comparing unemployment rates by state, we can gauge which states’ economies are stronger or struggling, see regional disparities, and track changes year by year.

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