The Jobless Rate Is at a Half-Century Low. In These States, It’s Even Lower.

There are recent signs that the national labor market is cooling as the Federal Reserve’s rapid interest-rate increases slow overall economic growth. December saw the smallest national monthly gain in jobs in two years and several large employers have announced layoffs.

“It’s been a somewhat uneven slowing,” said

Adam Kamins,

director of regional economics at Moody’s Analytics. “In some places, jobs are being lost while in other places the labor market is holding up pretty strong.” 

Here is how state job markets fared in the past year, according to the Labor Department.

Over a dozen states had an unemployment rate below 3% at the end of 2022, but none as low as Utah.

“Utah and a lot of the Mountain West, they recovered really rapidly,” Mr. Kamins said. Utah is “a state that has been growing very quickly, adding residents at one of the fastest rates in the nation for a while, absorbing them into new jobs in high-wage, white-collar industries like tech and finance.”

North Dakota and South Dakota closely followed, with both at a 2.3% unemployment rate in December. 

New Mexico’s rate dropped by 2 percentage points over 2022, the biggest decline of any state, reaching 3.9% in December. 

Many of the most significant declines in joblessness were in states that came into 2022 with unemployment rates above 5%, including New Jersey and Pennsylvania. 

Some states posted big job gains last year, while others barely notched an improvement. 

Texas and Florida saw the largest employment increases. Payrolls rose 5% in Texas in December from a year earlier and 4.8% in Florida. Nationwide employment rose 3%.

Mr. Kamins said cities in those states, such as Austin and Orlando, remained attractive areas for people who could work remotely. That was mostly because of those places’ affordability compared with more expensive coastal cities such as New York City and San Francisco. Milder climates were also a draw for relocating workers.

The Texas job market likely also benefited from oil companies beginning drilling projects there after Russia invaded Ukraine in early 2022 and oil prices surged, Mr. Kamins said.

Mississippi had the smallest job growth in 2022—adding about 500 jobs to its workforce of less than 1.2 million. Montana and North Dakota saw the next lowest employment gains, as a percentage, in December from the same month a year earlier.

Some states ended last year with an unemployment rate well above the national average. Nevada’s 5.2% unemployment rate followed by Illinois at 4.7% and Oregon at 4.5% were the highest in the nation at the end of last year. Mr. Kamins said the uptick in Oklahoma was likely due to its population growing and some of those people not being able to find suitable jobs yet.

Labor-market momentum has slowed noticeably in western states, such as California, Oregon and Washington, he said. The unemployment rates in those states have trended upward in recent months from lows touched in the summer and early fall.

“There are a lot of signs of weakness in the western U.S., certainly in their housing markets and in their year-over-year job growth,” Mr. Kamins said.

Write to Bryan Mena at [email protected]

There are recent signs that the national labor market is cooling as the Federal Reserve’s rapid interest-rate increases slow overall economic growth. December saw the smallest national monthly gain in jobs in two years and several large employers have announced layoffs.

“It’s been a somewhat uneven slowing,” said

Adam Kamins,

director of regional economics at Moody’s Analytics. “In some places, jobs are being lost while in other places the labor market is holding up pretty strong.” 

Here is how state job markets fared in the past year, according to the Labor Department.

Over a dozen states had an unemployment rate below 3% at the end of 2022, but none as low as Utah.

“Utah and a lot of the Mountain West, they recovered really rapidly,” Mr. Kamins said. Utah is “a state that has been growing very quickly, adding residents at one of the fastest rates in the nation for a while, absorbing them into new jobs in high-wage, white-collar industries like tech and finance.”

North Dakota and South Dakota closely followed, with both at a 2.3% unemployment rate in December. 

New Mexico’s rate dropped by 2 percentage points over 2022, the biggest decline of any state, reaching 3.9% in December. 

Many of the most significant declines in joblessness were in states that came into 2022 with unemployment rates above 5%, including New Jersey and Pennsylvania. 

Some states posted big job gains last year, while others barely notched an improvement. 

Texas and Florida saw the largest employment increases. Payrolls rose 5% in Texas in December from a year earlier and 4.8% in Florida. Nationwide employment rose 3%.

Mr. Kamins said cities in those states, such as Austin and Orlando, remained attractive areas for people who could work remotely. That was mostly because of those places’ affordability compared with more expensive coastal cities such as New York City and San Francisco. Milder climates were also a draw for relocating workers.

The Texas job market likely also benefited from oil companies beginning drilling projects there after Russia invaded Ukraine in early 2022 and oil prices surged, Mr. Kamins said.

Mississippi had the smallest job growth in 2022—adding about 500 jobs to its workforce of less than 1.2 million. Montana and North Dakota saw the next lowest employment gains, as a percentage, in December from the same month a year earlier.

Some states ended last year with an unemployment rate well above the national average. Nevada’s 5.2% unemployment rate followed by Illinois at 4.7% and Oregon at 4.5% were the highest in the nation at the end of last year. Mr. Kamins said the uptick in Oklahoma was likely due to its population growing and some of those people not being able to find suitable jobs yet.

Labor-market momentum has slowed noticeably in western states, such as California, Oregon and Washington, he said. The unemployment rates in those states have trended upward in recent months from lows touched in the summer and early fall.

“There are a lot of signs of weakness in the western U.S., certainly in their housing markets and in their year-over-year job growth,” Mr. Kamins said.

Write to Bryan Mena at [email protected]