May’s jobs report showed an uptick in growth
With inflation remaining high and the U.S. gaining 339,000 jobs in May, more than in the previous month, WalletHub today released updated rankings for its report on Changes in Unemployment Rate by State, along with a WalletHub Q&A. View the complete survey findings and infographics here.
May’s jobs report showed an uptick in growth. The economy gained 339,000 nonfarm payroll jobs, up from 294,000 the previous month. In May, there were notable gains in sectors including professional and business services, government, health care, construction, transportation and warehousing, and social assistance.
Now, the U.S. unemployment rate sits at 3.7%. We have come a long way from the nearly historic high of 14.7% in May 2020, due to a combination of vaccinations and the country fully reopening. However, inflation and the potential of a recession threaten to push the unemployment rate higher again if Federal Reserve rate increases are not able to stave them off.
In order to take stock of how unemployment rates are changing throughout the U.S., WalletHub compared the 50 states and the District of Columbia based on six key metrics that compare unemployment rate statistics from the latest month for which data is available (May 2023) to key dates in 2023, 2022, 2020 and 2019.
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WalletHub Q&A
With the summer coming up, how will seasonal jobs affect unemployment?
“With the arrival of summer, seasonal jobs should lower unemployment rates. However, given the current tight labor market environment, the hospitality industry will need maximum participation to fill open vacancies for the summer season,” said Jill Gonzalez, WalletHub Analyst. “Even before the summer season, many of these positions went unfilled, as job openings rose sharply over the last year or so. Because unemployment is already so low nationally, seasonal jobs will put more pressure on the job market and may even push inflation, forcing the fed to change its plans.”
How is artificial intelligence impacting unemployment?
“AI is impacting unemployment in various ways. On the one hand, AI is creating new jobs in fields such as data analysis, machine learning, and programming. On the other hand, AI is also causing job displacement as many tasks that were once performed by humans are now being automated,” said Jill Gonzalez, WalletHub Analyst. “Certain jobs in fields like journalism, higher education, graphic and software design are already at risk of AI replacement, and could lead to higher unemployment sooner rather than later.”
How do the recent banking collapses affect unemployment?
“The recent banking collapses can affect unemployment in a couple of ways. When a bank collapses, it can lead to a reduction in the availability of credit. As a result, businesses may cut back on their hiring, leading to an increase in unemployment,” said Jill Gonzalez, WalletHub Analyst. “Banking collapses can also lead to a loss of confidence in the economy, which can have a negative impact on consumer spending. A reduction in demand for goods and services might follow, which can in turn lead to a reduction in hiring.”
What are unemployment predictions for 2023?
“The U.S. economy is expected to grow very little in 2023. This would lead to a jump in unemployment to as high as 4.6 percent, according to the Federal Reserve. Both of these things would be signs of the Fed continuing to try and get a handle on inflation,” said Jill Gonzalez, WalletHub Analyst. “If this ‘worst-case scenario’ comes true, it could mean that millions of people who now have jobs could wind up unemployed.”
Which state has experienced the biggest increase in unemployment vs. the previous month?
“Montana has experienced the biggest increase in unemployment because the number of unemployed persons jumped by 3% from April 2023 to May 2023, compared to the average decrease of 1.5%,” said Jill Gonzalez, WalletHub Analyst. “Montana’s overall unemployment rate is 2.3%, compared to the average of 3.7%.”
Which state has experienced the biggest decrease in unemployment vs. the previous month?
“Vermont has experienced the biggest decrease in unemployment because it has seen an 11% decrease in the number of unemployed persons from April 2023 to May 2023, compared to the average decrease of 1.5%,” said Jill Gonzalez, WalletHub Analyst. “Vermont’s overall unemployment rate is 2.1%, compared to the average of 3.7%.”
