Job Growth Took a Step Back While Unemployment Rates Trended Higher
Source: Economics Group of Wells Fargo Bank, N.A.
Summary
State Labor Markets Cooling Off
- State payrolls continued to expand in June, but at a more moderate pace than in recent months. Higher trending state unemployment rates also revealed a broad softening in state labor markets.
- Rising unemployment has historically been linked to heightened economic risk. The count of states registering trend unemployment rate increases ticked up from 21 in May to 24 in June, but remains below the 34-state threshold historically associated with the onset of recessions.
- Thirty-four states added headcounts over the month. North Carolina’s led the nation with 23.1K payrolls added in June, just surpassing California’s 22.5K gain. Meanwhile, job gains softened among usual heavy hitters like Texas and Florida.
- Fifteen states shed payrolls in June. Minnesota posted the largest absolute contraction, followed by Mississippi and Ohio.
- Jobless rates turned up in 18 states over the month, the highest share since October 2023. Ten states registered lower unemployment rates and 22 posted no change.
- Aside from Washington, D.C., California and Nevada held the highest unemployment rates in the nation at 5.2% each.
- South Dakota boasted the lowest state unemployment rate (2.0%), followed closely by North Dakota and Vermont (2.1% each).