State Labor Markets Continued to Expand in June: A Rise in Unemployment Portends Potential Slowdowns Ahead

Economics Group of Wells Fargo Bank, N.A.

Summary

States are Still Hiring, but Momentum Appears to be Fading

  • The pace of hiring decelerated across states in June however a majority of states still registered payroll gains. A total of 38 states expanded headcounts over the month, equal to May’s downwardly-revised count.
  • Unemployment seems to be trending up in some states alongside a slower pace of hiring. The jobless rate rose in 10 states in June, up from seven states in May (chart).
  • Although unemployment rates are beginning to inch up across a growing number of states, the economy is not currently experiencing a trend rise in unemployment that would be indicative of a rapidly approaching recession. Five states registered trend unemployment rate increases in June, equal to May’s count (chart).
  • Texas led the nation by adding 31,100 payrolls in June. The next largest expansions were registered in New York, Washington, California and Missouri.
  • Twelve states shed payrolls over the month. Indiana experienced the largest contraction losing 13,900 jobs on net. Connecticut, Massachusetts and Minnesota, which experienced the next highest losses, shed fewer than 5,000 payrolls each.
  • As of June, 38 states have met or surpassed their pre-pandemic payroll levels, up from 37 states in May. Illinois was the latest addition. Payrolls in Hawaii, Vermont and West Virginia trail their pre-COVID levels by the largest percentage.

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