In May 2024, the national unemployment rate hit 4%. This is the first time it has risen to 4% since December 2022. The jobless rate has been very low since then and is still considered relatively low.
Unemployment rates were lower in May than in April in 4 states, higher in 3 states, and stable in 43 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported in the most recently available statistics.
North Dakota and South Dakota had the lowest jobless rates in May, 2% each. The next lowest rate was in Vermont, 2.1%. The rates in Arizona (3.4%) and Tennessee (3%) set new series lows.
On the other end of the spectrum, the District of Columbia had the highest unemployment rate, 5.3%, closely followed by California, 5.2%, and Nevada, 5.1%. In total, 24 states had unemployment rates lower than the U.S. figure of 4%, 4 states and the District had higher rates, and 22 states had rates that were not appreciably different from that of the nation.
Unemployment rates are still considered low. Record low unemployment has been achieved for African Americans, Hispanic Americans, and people with disabilities — and a 70-year jobless low for women. Employment continued to “trend up” in professional and business services, health care, leisure and hospitality, and social assistance.
A low level of unemployment sounds like great news for American workers but it presents challenges too. Economists say that inflation cannot ease significantly while unemployment is this low. For small businesses, the problem can be really acute. Not only is it hard to fill job openings, but salary pressure is intense and if there aren’t enough skilled workers, the business stagnates or slumps.
Looking At Unemployment Data By City
In this story, we are taking a look at unemployment rates by city to get a feel for the job landscape across America. Using Bureau of Labor Statistics data, we have created a list that ranks the jobless statistics for the 50 cities that show the largest populations within their respective states.
On our list, Las Vegas, Nevada is the city with the highest unemployment, closely followed by Los Angeles and then Chicago. Within this list, many fascinating — and even contradictory — trends are revealed that have bearing on small business owners.
What is the Unemployment Rate and How Is it Calculated?
The labor force participation rate in May 2024 was 62.5%, which is virtually the same as April. Why doesn’t that align with a 4% unemployment average?
The Bureau of Labor Statistics, which falls under the Department of Labor, measures labor market activity, working conditions, price changes, and productivity in the U.S. economy. The unemployment rate for any area is the number of area residents without a job and looking for work divided by the total number of area residents in the labor force.
In other words, the unemployment rate represents the number of unemployed people as a percentage of the labor force (the labor force is the sum of the employed and unemployed).
The key factor is the BLS unemployment rate will not tell you how many people have taken themselves out of the workforce, perhaps becoming so discouraged in their job search that they have given up hope of finding a job. The number of people not in the labor force who currently want a job declined by 483,000 to 5.2 million.
Some economists say that the low unemployment could be due, in part, to a low labor participation rate.
50 State Unemployment Rates
As previously noted, we have taken the city with the largest population in each of the 50 states as the city to track within its state, beginning with the city that had the lowest rate of unemployment and moving to the highest. The data from May 2024 was the most recently obtainable from the Bureau of Labor Statistics.
Washington, D.C.
The nation’s capital of Washington, D.C., population 712,000, showed an unemployment rate of 5.3%, which is one of the highest for any large city in America.
The 50 Cities Ranked Lowest to Highest in Jobless Rate
And now, our list of ranked cities.
50.) Burlington, Vermont
In May, the city of Burlington showed an unemployment rate of 1.7%. The statewide unemployment rate was 2.1%. “There are nearly three job openings for every unemployed Vermonter,” according to the Vermont Department of Labor. Burlington is the industrial, tourist, and financial center of the state, with a population of 44,700. Burlington also has the distinction of being the least populous city in the 50 states to be listed as the most populous city within its state.
49.) Sioux Falls, South Dakota
South Dakota showed an unemployment rate of 2%. “South Dakota traditionally has a lower unemployment rate than the rest of the country,” explained an economics professor in a recent paper. But the state’s low rates in 2023 and 2024 — and the extremely low 1.7% jobless rate of its largest city, Sioux Falls — creates a “double-edged sword.” The super-tight labor market means economic growth can be difficult, warned the same economist.
48.) Fargo, North Dakota
Fargo, population 126,000, showed an unemployment rate of 1.9% in May 2024, while the state’s unemployment was 2%. One reason North Dakota has had such a low unemployment rate for years is because it is the fifth least-populated state in the United States. Fargo’s economy is based on education, the medical industry, agricultural equipment, and services.
47.) Manchester, New Hampshire
The state of New Hampshire continued to show low unemployment at 2.5% in May. The jobless rate of Manchester, population 115,000, decreased from 2.4% in April to 2% in May. The continued low jobless rate does create special challenges, such as dealing with the size of the workforce, which is smaller in New Hampshire than it was before the start of the Covid-19 pandemic.
46.) Huntsville, Alabama
The May 2024 jobless rate for Alabama of 3% continues the streak of low joblessness for the state. The unemployment rate of of 2% for Huntsville makes it one of the country’s lowest for cities of its size. A city of rapid growth, Huntsville’s leading sectors are aerospace, defense, information technology, bioscience, and advanced manufacturing. “Alabamians have been finding jobs in record numbers for many months now,” said the state’s governor in a recent interview.
45.) Honolulu, Hawaii
With a population of 345,000, Honolulu had an unemployment rate of 2.1% in May, down from 2.5% in April. Job gains were seen in professional and business services, trade, transportation and utilities, and private education and health services. Overall, Hawaii had an unemployment rate of 3%.
44.) Portland, Maine
Maine’s unemployment rate was 3%. Unemployment has been below 4% for 28 consecutive months, the third longest period of such low rates for the state of Maine. The city of Portland’s was even lower at 2.3%. The state’s economic boom was driven mostly by the leisure and hospitality sector, which added the most jobs since the beginning of Covid-19.
43.) Nashville, Tennessee
The city of Nashville has seen its unemployment rate drop a point over the last five months to 2.3% in May 2024, with the state’s jobless rate coming in at 3%, one of the biggest decreases among all the states. The city is famous for music and entertainment, but healthcare and manufacturing are leading sectors as well. The city, population 1.3 million, is one of the fastest growing in America.
42.) Baltimore, Maryland
At 2.4%, Baltimore continues to rank low for unemployment. Maryland also ranks among the lowest states in unemployment at 2.6%. What makes the achievement of the Baltimore metropolitan area particularly newsworthy is that for the last year it has posted in the bottom 3 for joblessness among large U.S. metro areas with 1 million or more in population.
Recommended: Maryland Small Business Grants
41.) Jackson, Mississippi
With a population of 149,000, Jackson had a jobless rate of 2.5% in May, going up almost a percentage point from 1.6% in April. Jackson has a lower cost of living average than the U.S. average and shows major sectors in advanced manufacturing, health care, information technology, and food processing. The state of Mississippi’s unemployment rate was 2.8%.
40.) Des Moines, Iowa
The largest city in Iowa had a May 2024 jobless rate of 2.6%, compared to 2.1% in April. Iowa’s seasonally adjusted unemployment rate was 2.8% in May, unchanged from April and the same as one year ago.The state is recognized for its leading position in the agricultural sector, particularly corn, soybean, pork, and egg production.
39.) Minneapolis, Minnesota
With an unemployment rate of 2.6% in May, Minneapolis is surging. The Twin Cities are expected to continue to thrive through 2024, with industries such as healthcare, finance, manufacturing, and technology playing an expanded role. Minnesota’s unemployment rate was 2.8%.
38.) Billings, Montana
The largest city in Montana showed an unemployment rate of 2.7% in May. Billings has a history of strength in agriculture and energy; more recently, it has focused on retail. Total employment and the number of people in the labor force were mostly unchanged in Montana in May, leading to no change in the unemployment rate of 3.1% since April.
37.) Virginia Beach, Virginia
Virginia Beach has a jobless rate of 2.8%, edging up from a month earlier but still lover than a year ago. Real estate, defense, and tourism are major sectors of the city’s economy. The state has a jobless rate of 2.7%.According to household survey data in May, the state’s labor force decreased by 5,946 to 4,578,538 as the number of unemployed residents decreased by 4,972 to 124,379.
36.) Omaha, Nebraska
In May, Nebraska continued its low unemployment rate of 2.5%. Nebraska’s low jobless rate is believed to be due to the dominance of industries like manufacturing and agriculture, which are less volatile than the energy or hospitality sectors during downturns. Omaha, population 487,000, had a jobless rate of 2.8%.
35.) Phoenix, Arizona
Phoenix, population 1.6 million, has seen its unemployment rate plunge in the last six months. It’s now at 2.9%, compared to 4% last August. One of the fastest-growing cities in America, Phoenix reached a record jobless high of 13.7% in April of 2020 and a record low of 2.5% in April of 1998. In the last 50 years, Phoenix’s economy has been powered by hospitality and leisure, but the city is also home to a growing number of high-tech, IT, renewable energy, and bioscience industries. Arizona had a 3.4% jobless rate in May.
Recommended: Small Business Grants in Arizona
34.) Jacksonville, Florida
The largest city in Florida with a population of 954,000, Jacksonville had a jobless rate of 3% in May, edging down from 3.2% in April. The state of Florida showed an unemployment rate of 3.3% in May. It was one of the states with the largest gain in employment with +222,200). Florida’s unemployment rate has remained lower than the national rate for 40 consecutive months.
Recommended: Small Business Grants in Florida
33.) Little Rock, Arkansas
Arkansas’s unemployment rate was 3.4% in May 2024, the same as in April. Little Rock, its largest city at 202,000, showed a jobless rate of 3.1%, a decrease over the last several months. Healthcare is a leading sector in Little Rock, followed by manufacturing and construction.
32.) Cheyenne, Wyoming
With a jobless rate of 3.1%, Cheyenne’s economy is based on light manufacturing, agriculture, the military and government, tourism, and transportation. Cattle- and sheep-raising continue to thrive throughout the region too. The unemployment rate in Wyoming was 2.9% in May, pretty much unchanged for the last six months.
31.) Charleston, South Carolina
The May jobless rate of 3.1% for Charleston, population 151,000, helps it return to pre-pandemic status and more. In April 2020, unemployment raged at 13%. The city’s economic strength is diverse, ranging from aerospace and life sciences to hospitality. The statewide unemployment rate was 3.4% in May 2024.
30.) Salt Lake City, Utah
Salt Lake City had a jobless rate in May 2024 of 3.1%, inching up from 2.8% in April. Known as the “Crossroads of the West,” the city’s major industries are government, trade, transportation, utilities, and professional and business services. The state’s unemployment rate is also 2.9%.
29.) Boise, Idaho
With a population of 237,000, Boise had a jobless rate of 3.2% in May, virtually unchanged since April. The major economic drivers in the region include semiconductor and other computer product manufacturing, food product manufacturing, administrative and business support services, and construction. Statewide unemployment stood at 3.3%.
28.) Oklahoma City, Oklahoma
The largest city in Oklahoma hung in there with a low jobless rate of 3.3% in May. Oklahoma City has one of the world’s largest livestock markets, with oil, natural gas, and petroleum products as its largest sectors. As for the state, Oklahoma’s rate of 3.5% is part of a slow increase over the last six months.
27.) Wichita, Kansas
The unemployment rate in Wichita, population 395,000, was 3.4% in May. Agriculture, manufacturing, healthcare, and energy drive the Wichita regional economy. The state of Kansas had a jobless rate of 2.9% in May, which means it is holding to its two years of low joblessness.
26.) Atlanta, Georgia
Georgia’s largest city with a population of 496,000, Atlanta had a jobless rate of 3.4% in May, up from 2.8% in April. Georgia’s unemployment rate rate was 3.2%. The sectors with the most job gains included accommodation and food services, health care and social assistance, arts, entertainment, recreation, and management of companies and enterprises.
25.) Milwaukee, Wisconsin
The state of Wisconsin had a jobless rate of 2.9% in May 2024, edging up from its unemployment rate low of 2.4% in April 2023. Its largest city, Milwaukee, had an unemployment rate of 3.4%. The three sectors that comprise most of Milwaukee’s workforce are service sectors, manufacturing, and retail trade.
24.) Charlotte, North Carolina
With a population of 879,000, Charlotte is home to corporations such as MetLife, NASCAR, Wells Fargo, Bank of America, and Lowe’s. Its unemployment rate was 3.4% in May, while the state’s jobless rate was 3.6%. Unemployment rates (not seasonally adjusted) increased in 95 of North Carolina’s counties in May 2024, decreased in four, and remained unchanged in one.
23.) Kansas City, Missouri
Missouri had a jobless rate of 2.9% in May 2024, and Kansas City, its largest city, had a rate of 3.4%, up from 3% in April. The unemployment rate in Missouri reached a record high of 11.4% in April of 2020 and a record low of 2.1 in May of 2022. Kansas City is the third largest beef-processing city in America and has strong sectors in health care, tech, retail, and finance.
22.) Boston, Massachusetts
At 3%, Massachusetts showed low unemployment in May, but Boston’s unemployment moved up to 3.5% in May, up from 2.8% in April. The city is the economic engine and cultural hub of New England, with higher education, health care, and financial services as the major drivers. In a recent survey of cities most attractive to recent college graduates when considering job openings and affordability, Boston came in at number 12, making it the top city in the Northeast.
21.) New Orleans, Louisiana
The May 2024 jobless rate of 3.6% in the Big Easy ticked up slightly from 3.65 the previous month. And unemployment has come a long way since its alarming Covid-19 days of 20% in April 2020 and an April 2021 rate of 9%. As a tourist favorite and a major port on the Gulf Coast, New Orleans is considered an economic and commercial hub, and Louisiana’s 4.1% unemployment rate is considered low for the state.
20.) Indianapolis, Indiana
The city of Indianapolis showed an unemployment rate of 3.6% in May. An economist said in 2023 that there were 5 job seekers for every 10 open positions in the state. Central Indiana’s life sciences and healthcare sector generates nearly $84 billion in total economic output. The state of Indiana showed a jobless rate of 3.7%.
19.) Charleston, West Virginia
The city with the largest population in West Virginia has 46,700 people and an unemployment rate of 3.7% in May, the same as in April. As it is the state capital, Charleston has government jobs as well as those in trade, utilities, education, and medicine. The chemical industry and the manufacturing sector are also significant. The jobless rate in West Virginia is 4.2%.
18.) Wilmington, Delaware
Located midway between Washington, D.C. and New York City, Wilmington is Delaware’s largest city and its economic engine. Wilmington had an unemployment rate of 3.7% in May, up slightly from 3.6% in April. The state itself is at 3.9% unemployment.
17.) Albuquerque, New Mexico
The largest city in New Mexico had a jobless rate of 3.7% in May, up from 3.1% in April, a long way down from its pandemic high of 10%. Albuquerque and the rest of the state are on a growth curve — the top three industries are oil drilling and gas extraction, scientific research and development, and hospitals. New Mexico’s unemployment rate was 3.8% in May.
16.) Portland, Oregon
Oregon’s unemployment stands at 4.2%, higher than the national average, while Portland, its largest city, has a jobless rate of 3.8%. This progress could ease the concerns of Portland leaders, who thought that, compared to similarly-sized cities, Portland was lagging behind on financial recovery from Covid-19.
15.) Anchorage, Alaska
Anchorage, the city with the largest population in Alaska, had a jobless rate of 3.9% in May, down from 4.1% in April. Alaska often shows a relatively high unemployment rate. Over the last 40 years, the average unemployment rate in the United States has been 6.3%, while in Alaska, it averaged 7.9% since 1976. Therefore, the Mayr rate of 4.5% is low for this state.
14.) Denver, Colorado
Colorado’s jobless rate was 3.8% and Denver, its largest city, had a rate of 3.9%. Considered a magnet for work-from-home professionals, Denver is a fast-growing city, but one with housing costs that are 36% higher than the national average. Software and financial services are among its hottest industries. Aerospace, digital communications, and food and beverage sectors are also expanding.
Recommended: Small Business Grants in Colorado
13.) Philadelphia, Pennsylvania
The unemployment rate for Philadelphia stood at 3.9% and the state of Pennsylvania ranked at 3.4% in May 2024, and while that may not sound like one of the good news stories, Pennsylvania’s jobless rate continues a record low for the state. This low unemployment bolsters the region’s ongoing recovery from the pandemic, which hit Philly hard and led to the loss of more than 100,000 jobs in the first two months alone of Covid-19.
12.) Louisville, Kentucky
With an unemployment rate of 4% in May, the city is seeing job growth as payrolls have managed to expand. In April the jobless rate was 3.8%. Louisville, with a population of 628,000, is known for shipping and cargo and, more recently, for major manufacturing, with two Ford plants in the region, and health care. Kentucky’s jobless rate of 4.6% is higher than the national average.
11.) Houston, Texas
Houston’s May unemployment rate at 4% was the exact same as the state of Texas’ rate. Since June 2022, Texas employment grew by over 542,500 positions— the largest annual increase in the nation. The expanding ranks of the unemployed is believed to reflect an increase in the size of the metropolitan workforce rather than layoffs in the state with the second-highest population in the United States.
Recommended: Small Business Grants in Texas
10.) Providence, Rhode Island
With a population of 189,000, Providence had a jobless rate of 4.3% in May and the state’s unemployment rate was the same. About one-third of the city’s economy is based in trade, transportation, utilities, and educational and health services. The four Fortune 500 companies based in Rhode Island are CVS Heath, United Natural Foods, Textron, and Citizens Financial Group.
9.) Detroit, Michigan
The unemployment rate of 5.2% in Detroit in May 2024 was actually quite a feat in a city that went through bankruptcy and experienced a 61% decrease in population from 1950 to 2010, lowering its ranking from the 4th most populous city in America to the 27th. Detroit’s jobless rate was an eye-popping 27% in June 2009. But new development in the city fuels talk of a real comeback post Covid-19. The state’s jobless rate was 3.9%.
8.) Seattle, Washington
Seattle, population 733,000, was tracking above the national unemployment rate with a jobless figure of 4.3% in May. Thousands of tech sector layoffs in the Seattle area have had an impact, but the city continues to support innovation. Overall, the unemployment rate is considered low. Washington’s unemployment rate was a high 4.9% in May.
7.) Columbus, Ohio
Ohio’s unemployment rate was 4.2% in May 2024. Columbus, its largest city, clocked in at 4.3%. However, job growth could slow as employers struggle to fill openings in such a tight market, Columbus leaders say. The city does a great job of drawing young professionals with diverse sectors, ranging from education and food to defense and steel.
6.) Bridgeport, Connecticut
The unemployment rate in Bridgeport, population 148,000, rose to 4.4% in May from 3.6% in April. The state was at 4.3% in May. While some fled New York or New Jersey during the pandemic, Connecticut added 66,000 people in 2021. However, Bridgeport struggles, with some 19% of its residents living in poverty.
5.) Newark, New Jersey
In May, the city’s unemployment rate was 4.6%, up from 4.2% in April. This is a marked decrease from a high of 9.7 percent in 2010. The city of Newark has a population of over 305,000, and some 25% of residents are living in poverty, according to U.S. Census data. The state’s jobless rate of 4.6% is well above the national average.
4.) New York, New York
The Big Apple had a jobless rate of 4.6% in May, up from 4.2% in April, which makes it one of the cities on our list with an unemployment rate higher than the national average. However, New York City, with its population topping 8.4 million, is also beginning to show gains in employment three years after the start of Covid-19. New York is estimated to have lost about 2 million jobs in the immediate wake of the pandemic. The state has a jobless rate of 4.2%.
Recommended: Small Business Grants in New York
3.) Chicago, Illinois
The May 2024 unemployment rate of 4.8% ticked up from 4.3% in April. The city and its suburbs are home to 35 Fortune 500 companies, with strengths in manufacturing, printing, insurance, transportation, financial trading, and food processing. Illinois’s rate of 4.9% was one of the highest in the nation.
2.) Los Angeles, California
The city on our list with the second-highest population in America at 3.9 million had an unemployment rate of 5.2% in May, up from 4.2% in April. The state has struggled since Covid-19. The state’s unemployment rate was 5.2%. Several factors are believed to contribute, including a mismatch between job skills among those who seek employment and what skills are needed.
1.) Las Vegas, Nevada
On our list, Las Vegas, the largest city in Nevada, had the highest rate at 5.6%, up from 5.2% in April 2024. Las Vegas shows a lot of turbulence in employment, with a high number of people in the workforce actively looking for jobs while the city shows the lingering effects of the Covid-19 lockdown. Nevada’s rate was 5.1%.
What Factors Affect Unemployment Rate?
Unemployment is a key measure of the health of the American economy and considerable resources are put into analyzing it. There are many different reasons for unemployment. Apart from the common causes found in any economy–a worker leaving for another job or being fired–there is cyclical unemployment and structural unemployment.
Cyclical unemployment is caused by economic downturns or is related to changes in business conditions, As the name indicates, it can be temporary. After a recession ends, unemployment falls.
Structural unemployment is different. It usually means there is a mismatch between the jobs available and the skill levels of the unemployed. Technological changes, a lack of relevant skills, and jobs moving overseas to another country cause structural unemployment.
Structural unemployment can be hard for a society to deal with — it produces permanent disruptions in the economy and obviously a lot of stress among the people who want to work but can’t get a job.
Recommended: How Does Unemployment Work?
How Does a Low Unemployment Rate Affect The Economy?
The problem of high unemployment seems far away indeed. A reasonable unemployment rate is somewhere between 3% and 5%. The current low rate of unemployment means that the economy is producing near its full capacity, maximizing output, and driving wage growth.
However, the labor market can reach a point where each additional job added does not create enough productivity to cover its cost. This causes an output gap, or the “slack,” in the labor market. The economy is in danger of becoming “overheated.”
How Does Unemployment Affect Small Businesses?
When there’s an increasing demand for labor yet the unemployment rate keeps falling, this causes wage inflation. With fewer people available to work, employers have to increase wages to attract and hold on to talent. While that’s pleasant for the workers, some businesses can’t afford to pay a lot more. The money that might go to growing the business has to go toward payroll.
And when there are more jobs than there are people with the necessary skills and experience, this leads to employees feeling overwhelmed and stressed. Small businesses typically have less money to funnel toward training and recruitment. This is a time when small businesses may turn to debt financing, whether it’s seeking a small business loan or looking for investors.
Recommended: Six Step Guide to Getting a Small Business Loan
The Takeaway
In May 2024, Las Vegas, Nevada, continued to be the city on our list with the highest unemployment at 5.6%. The cities with the lowest unemployment were Burlington, Vermont, and Sioux Falls, South Dakota, both at 2% or even lower.
If you’re seeking financing for your business, SoFi can help. On SoFi’s marketplace, you can shop top providers today to access the capital you need. Find a personalized business financing option today in minutes.
If you’re seeking financing for your business, SoFi can help. On SoFi’s marketplace, you can shop top providers today to access the capital you need. Find a personalized business financing option today in minutes.
Photo Credit: iStock/glegorly
SoFi's marketplace is owned and operated by SoFi Lending Corp. See SoFi Lending Corp. licensing information below. Advertising Disclosures: SoFi receives compensation in the event you obtain a loan through SoFi’s marketplace. This affects whether a product or service is featured on this site and could affect the order of presentation. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SOSB-Q224-1925450-V1