The latest regional job report from the U.S. Department of Labor revealed that total nonfarm employment increased in five states in July and was essentially unchanged everywhere else. The largest gains last month occurred in Texas (+35,200), Florida (+22,900), and Washington (+13,400), states that are also enjoying some of the strongest year-over-year payrolls growth in the country. Moreover, common traits shared by many of the states experiencing above-trend employment gains are no (or low) income taxes and a favorable regulatory environment. Such conditions are supportive of the stream of residential, commercial, and infrastructure projects that entice businesses to a region. These firms ultimately become the local job creators that attract more Americans to an area and result in regional economic outperformance.
As for joblessness, the unemployment rate declined in six states in July and three states over the past 12 months. The rates of joblessness set new record lows in Alabama (3.3 percent), Arkansas (3.4 percent), Maine (3.0 percent), and New Jersey (3.3 percent) in July, and Vermont once again had the lowest unemployment rate in the country (2.1 percent). Only eight states last month had a rate of joblessness that was higher than the national level (3.7 percent). For an additional comparison, during the worst part of the “Great Recession” eleven states had an unemployment rate that exceeded 11 percent, while the highest rate of joblessness in the entire country last month was just 6.3 percent (Alaska). A more detailed look at the employment landscape in America can be found in our Labor Market Snapshot, one of a growing series of economic reports we update regularly.
Sources: U.S. DoL, Calculated Risk