The job market has broadly improved in the US over the past year, with each state adding jobs in 2022, but the pace of gains has varied widely.
The national unemployment rate fell to a seasonally adjusted 3.5% in December, the lowest in half a century. Some states had significantly lower rates. Utah had the lowest rate in the country last month at 2.2%, according to the Department of Labor. Interest rates in other states were much higher, led by Nevada at 5.2%.
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More recently, there have been signs that the national job market is slowing as rapid rate hikes by the US Federal Reserve slowed overall economic growth. December saw the lowest nationwide monthly job growth in two years and several large employers announced layoffs.
“It’s been a somewhat uneven slowdown,” said Adam Kamins, director of regional economics at Moody’s Analytics. “In some places jobs are being lost while in other places the job market is holding up pretty well.”
According to the Ministry of Labour, this is how the state labor markets have developed over the past year.
Over a dozen states had unemployment rates below 3% at the end of 2022, but none were as low as Utah.
“Utah and much of Mountain West recovered very quickly,” Mr. Kamins said. Utah is “a state that has been growing very rapidly and for some time has been adding residents at one of the fastest rates in the country and incorporating them into new jobs in high-wage and office industries like technology and finance.”
North Dakota and South Dakota followed closely, both with December unemployment rates at 2.3%.
The rate in New Mexico fell 2 percentage points over the course of 2022, the sharpest decline of any state, reaching 3.9% in December.
Many of the sharpest falls in unemployment have been in states that entered 2022 with unemployment rates above 5%, including New Jersey and Pennsylvania.
Some states saw large job gains over the past year, while others saw little improvement.
Texas and Florida saw the largest job gains. December payrolls in Texas rose 5% year-on-year and 4.8% in Florida. Nationwide employment increased by 3%.
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Mr. Kamins said cities in those states, like Austin and Orlando, remained attractive areas for people who could work remotely. This was largely due to the affordability of these locations compared to pricier coastal cities like New York City and San Francisco. Milder climates were also a magnet for resettling workers.
The Texas job market also likely benefited as oil companies started drilling projects there after Russia invaded Ukraine in early 2022 and soared oil prices, Mr. Kamins said.
Mississippi saw the lowest job growth in 2022 – adding about 500 jobs to its workforce of fewer than 1.2 million. Montana and North Dakota posted the second-lowest percentage job gains in December compared to the same month last year.
Some states ended last year with unemployment rates well above the national average. Nevada’s unemployment rate of 5.2%, followed by Illinois at 4.7% and Oregon at 4.5%, was the nation’s highest late last year. Mr. Kamins said the increase in Oklahoma is likely because the population is growing and some of those people are yet to be able to find suitable jobs.
Labor market dynamics have slowed noticeably in western states like California, Oregon and Washington, he said. Unemployment rates in these states have trended higher in recent months from summer and early fall lows.
“There are many signs of weakness in the western US, certainly in its housing markets and annual job growth,” said Mr. Kamins.
Write to Bryan Mena at [email protected]
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