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The national unemployment rate in June 2023 was 3.6%, showing a tiny increase from 3.4% in May, demonstrating that the tightest labor market in decades is showing no signs of loosening. In fact, the national unemployment rate has been under 4% since December 2022. Among the cities with the lowest unemployment in the country, the standout is Baltimore, Maryland, which posted the lowest jobless rate, 1.7%, among large U.S. metro areas with 1 million or more in population.Unemployment rates were lower in June 2023 than they were a year earlier in 222 of the 389 metropolitan areas, higher in 119 areas, and unchanged in 48 areas, said the Bureau of Labor Statistics (BLS), which gathers job data. Nine states showed record low unemployment in June. Moreover, 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 very 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.Recommended: 25 Low-Investment Business IdeasLooking At Unemployment Data By City
In this story, we are taking a look at unemployment rate 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. In June, Baltimore was in a three-way tie for the city on our list with the lowest unemployment, along with Manchester, New Hampshire, and Sioux Falls, South Dakota, all at 1.7%.
On our list, the city with the highest unemployment was Las Vegas, Nevada, at 6%. Rounding out the top three when it comes to joblessness were Los Angeles, California, and Newark, New Jersey.
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?
In June 2023, the labor force participation rate for people age 16 and older was 62.6% for the fourth consecutive month
Why doesn't that align with a 3.6% 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 long-term unemployed (those jobless for 27 weeks or more), at 1.1 million, changed little in June and accounted for 18.5% of the total unemployed.
Some economists say that the low unemployment could be due, in part, to a low labor participation rate. What is the labor force participation rate? It’s the percentage of the population that is either working or actively looking for work. The number of persons employed part time for economic reasons increased by 452,000 to 4.2 million in June, partially reflecting an increase in the number of persons whose hours were cut due to slack work or business conditions.Recommended: Unemployment for Small Business Owners
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 June 2023 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 5.5% in June 2023, 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.) Baltimore, Maryland
At 1.7%, Baltimore leaped seven spots to become the city on our list with the lowest unemployment. Maryland gained 4,700 jobs in June, and the statewide unemployment rate fell from 2.4% to 2.0%. The sector in the state that added the most jobs in June was that of mining, logging, and construction. What makes the achievement of the Baltimore metropolitan area particularly newsworthy is that it posted the lowest jobless rate among large U.S. metro areas with 1 million or more in population.
49.) Manchester, New Hampshire
Manchester, population 115,000, stayed in the bottom two by tying with Baltimore at 1.7% unemployment. As for the state, its 1.8% unemployment rate was the lowest it has been since record-keeping began in New Hampshire, and it is one of the states with the lowest unemployment in America. The good news does create special challenges, however, 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.
48.) Sioux Falls, South Dakota
South Dakota set a record-low state unemployment of 1.8%. “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 record low rate — and the 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.47.) Burlington, Vermont
In June, the city of Burlington showed an unemployment rate of 1.8% and the statewide unemployment rate was 1.9%. “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.46.) Portland, Maine
Maine's unemployment rate was a record low 2.4% for the third consecutive month. Unemployment has been below 4% for 19 consecutive months, the third longest period of such low rates for Maine. The city of Portland’s was even lower at 2.1%. The state’s economic boom was driven mostly by the leisure and hospitality sector, which added the most jobs since the beginning of Covid-19.45.) Huntsville, Alabama
The June 2023 jobless rate of 2.2% percent in 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. The state’s unemployment rate of 2.2% continued a streak of record lows for Alabama. “Alabamians have been finding jobs in record numbers for many months now,” said the state’s governor in a recent interview.44.) Fargo, North Dakota
Fargo, population 126,000, had a jobless rate of 2.2% in June 2023, 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.43.) Omaha, Nebraska
In June, Nebraska had the second lowest unemployment rate of any American state at 2%. Nebraska’s record low unemployment 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 2.2%.42.) Boston, Massachusetts
At 2.6%, Massachusetts was one of the nine states to show record low unemployment, with Boston’s unemployment rate at 2.7% in June. 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.41.) Billings, Montana
The largest city in Montana showed an unemployment rate of 2.7% in June. Billings has a history of strength in agriculture and energy; more recently, it has focused on retail. Montana reached its 20th consecutive month of unemployment below 3% in June,
and the state’s labor force participation rate was 75.6%.40.) Little Rock, Arkansas
At 2.6%, Arkansas is one of nine states to show record low unemployment in June 2023. Little Rock, its largest city at 202,000, showed a jobless rate of 2.7%. Compared to June 2022, there are 21,415 more employed Arkansans. Healthcare is a leading sector in Little Rock, followed by manufacturing and construction.39.) Salt Lake City, Utah
Salt Lake City had a jobless rate in June 2023 of 2.7%, only slightly higher than the state's rate of 2.4%. Known as the “Crossroads of the West,” the city's major industries are government, trade, transportation, utilities, and professional and business services. “Not much has really changed in the Utah economy through the first half of 2023,” said Department of Workforce Services’ Chief Economist Mark Knold. “Job growth is still strong and the unemployment rate remains very low."38.) Oklahoma City, Oklahoma
The largest city in Oklahoma showed some of the strongest movement in June, with a jobless rate of 2.8%. 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 moved down a bit in June, with a jobless rate of 2.7%, making it one of the nine with record low unemployment for the month.37.) Des Moines, Iowa
Des Moines had a June 2023 jobless rate of 2.9%. Iowa’s seasonally adjusted unemployment rate remained the same, showing 2.7% in June as it had in May and April. However, the state’s Iowa’s labor force participation rate increased once again in June to 68.7%, up from 68.5% in May. The state is recognized for its leading position in the agricultural sector, particularly corn, soybean, pork, and egg production.
36.) Charleston, South Carolina
The jobless rate of 3% in Charleston, population 151,000, helps it return to pre-pandemic status. 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 3.1% in June, same as in May.35.) Boise, Idaho
With a population of 237,000, Boise had a jobless rate of 3% in June. 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 2.7%34.) Nashville, Tennessee
The state of Tennessee had an unemployment rate of 3.2% in June 2023, but Nashville’s was lower, coming in at 3%. 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.33.) Jacksonville, Florida
The largest city in Florida with a population of 954,000, Jacksonville had a jobless rate of 3% in June 2023. Florida has the lowest unemployment rate among the nation’s 10 most populous states for the 13th consecutive month. Florida’s unemployment rate of 2.6 percent is one percentage point lower than the national rate of 3.6 and Florida’s unemployment rate has remained lower than the national rate for 32 consecutive months.
32.) Providence, Rhode Island
With a population of 189,000, Providence had a jobless rate of 3% in June, while the state had an unemployment rate of 2.9%. 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.31.) Cheyenne, Wyoming
With a jobless rate of 3%, 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 the state of Wyoming was 3.1% in June30.) Virginia Beach, Virginia
Virginia Beach has a jobless rate of 3%. Real estate, defense, and tourism are major sectors of the city’s economy. Meanwhile, the state of Virginia’s June employment rate edged downward in June to 2.7%, which is 0.2 of a percentage point above the rate from a year ago. The Commonwealth’s labor force participation rate rose to 66.6% in June.
29.) Kansas City, Missouri
Missouri has a jobless rate of 2.6% in June 2023, and Kansas City, its largest city, has a rate of 3.1%. 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.
28.) Honolulu, Hawaii
With a population of 345,000, Honolulu had an unemployment rate of 3.3% in June. 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%.27.) Denver, Colorado
Colorado showed a jobless rate of 2.8% in May and Denver, its largest city, had a rate of 3.3%. 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.26.) Minneapolis, Minnesota
With an unemployment rate of 3.3% in June, Minneapolis is surging. The Twin Cities are expected to continue to thrive throughout 2023, with industries such as healthcare, finance, manufacturing, and technology playing an expanded role. Minnesota's unemployment rate was 2.9%.25.) Columbus, Ohio
Ohio's unemployment rate was 3.4% in June 2023, down from 3.6% in May 2023. Columbus, its largest city, clocked in at 3.3%. 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.24.) Portland, Oregon
Oregon’s unemployment stands at 3.5%, while Portland, its largest city, has a jobless rate of 3.3%. 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-19.23.) Wichita, Kansas
The unemployment rate in Wichita, population 395,000, was 3.3% in June. Agriculture, manufacturing, healthcare, and energy drive the Wichita regional economy. The state of Kansas had a jobless rate of 2.8%, which is a decrease from 2.9% in May but an
increase from 2.6% in June 2022.
22.) Indianapolis, Indiana
The city of Indianapolis showed an unemployment rate of 3.3% in June. An economist said earlier 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 3.2%.21.) 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 June, compared with the state’s falling jobless rate of 3.1%. The seasonally adjusted, monthly survey of households estimated the number of South Carolinians working increased by 12,560 people over the May 2023 estimate.20.) Atlanta, Georgia
Georgia’s largest city with a population of 496,000, Atlanta had a jobless rate of 3.4% in June. Georgia’s unemployment rate rose slightly last month to 3.3%, up one-tenth of a point from the jobless rate of 3.2%. The sectors with the most over-the-month job gains included accommodation and food services, health care and social assistance, arts, entertainment, recreation, and management of companies and enterprises.
19.) Seattle, Washington
Seattle, population 733,000, stayed below the national unemployment rate with a jobless figure of 3.4% in June. Thousands of tech sector layoffs in the Seattle area have had an impact, but the city continues to support innovation. "The last time the unemployment rate was this low was in February 2020,” a state official said in an economic report.18.) Jackson, Mississippi
With a population of 149,000, Jackson has shown the greatest volatility among the cities on our list. It went from 2.4% jobless rate in April to 4.2% in May and is now hanging at 3.5%. 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 reached a new record low of 3.1%.
17.) Detroit, Michigan
The unemployment rate of 3.7% in Detroit in June 2023 is 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-19.16.) Charleston, West Virginia
The city with the largest population in West Virginia has 46,700 people and an unemployment rate of 3.7% in June, ticking up from 3.4% in May. 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.15.) Milwaukee, Wisconsin
The state of Wisconsin set a new unemployment rate low of 2.4% in April 2023 and is holding at 2.5% two months later. Its largest city, Milwaukee, is a different story. It has an unemployment rate of 3.8%. The three sectors that comprise most of Milwaukee’s workforce are service sectors, manufacturing, and retail trade. 14.) Louisville, Kentucky
With an unemployment rate of 3.8% in June, the city is seeing job growth as payrolls have managed to expand. However, it's worth noting that in April the city showed unemployment of 2.8% so it has seen a full percentage point increase over two months. 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.13.) Phoenix, Arizona
Phoenix, population 1.6 million, had an unemployment rate of 3.9% in June, increasing from 3.3% in May and 2.9% in April. 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.12.) Anchorage, Alaska
The city with the largest population in Alaska had a jobless rate of 3.9%. 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, this rate is low for Anchorage.11.) Philadelphia, Pennsylvania
The unemployment rate for Philadelphia stood at 3.9% and the state of Pennsylvania ranked at 3.8% in June 2023, and while that may not sound like one of the good news stories, Pennsylvania displayed a record-setting decrease. Pennsylvania's unemployment rate declined two-tenths of a percentage point since May, the lowest rate on record going back to January 1976. 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-19.10.) Wilmington, Delaware
Located midpoint between Washington, D.C. and New York City, Wilmington is Delaware’s largest city and its economic engine. Wilmington had an unemployment rate of 3.9% in June 2023. The state itself continues to decrease its jobless rate, reaching a new post-pandemic low in spring 2023.9.) Albuquerque, New Mexico
The largest city in New Mexico had a jobless rate of 4.2% in June, steadily decreasing since 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 seasonally adjusted unemployment rate was 3.5% in June, unchanged from the rate in May and down from 3.9% in the previous year.
8.) Bridgeport, Connecticut
The unemployment rate in Bridgeport, population 148,000, was 4.2% in June 2023. 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. Connecticut has gained 14,100 jobs in 2023, but its statewide unemployment rate of 3.7% is higher than the national average.
7.) Chicago, Illinois
The unemployment rate of 4.4% in Chicago showed an increase from 4.3% a year ago. 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 added 8,400 jobs in June, but unemployment remained high compared to the rest of the nation.
6.) New Orleans, Louisiana
The jobless rate of 4.5% in the Big Easy certainly showed a large decrease 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, but it struggles with crime, with the Wall Street Journal naming it as the major city with the highest homicide rate in America.5.) Houston, Texas
Houston’s unemployment rate at 4.5% aligns with Texas’ state rate of 4.1%. Since June 2022, Texas employment grew by 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.4.) New York, New York
The Big Apple had a jobless rate of 4.6% in June 2023, 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.3.) Newark, New Jersey
In June, the unemployment rate reached 4.6%. 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. Although New Jersey’s unemployment rate increased in June to 3.7%, the state’s labor market remained steady with a gain of 600 jobs and labor force participation rate rose to 65.4%, the highest since March 2013.
2.) Los Angeles, California
The city on our list with the second-highest population in America at 3.9 million has an unemployment rate of 4.9%, slightly higher than the rate of 4.5% in May. The state has struggled since Covid-19. In 2021, California hit the highest state unemployment rate in the country at 6.9%, compared with a nationwide rate of 4.2%. 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, Nevada had the highest unemployment of any state in the nation at 5.4%, and Las Vegas, its largest city, showed a rate of 6%. As has been the case with previous months, the labor force in the state actually grew, showing an increase of employed people equivalent to 2,900. 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.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: 5 Important Business FundamentalsHow Does a Low Unemployment Rate Affect The Economy?
In late summer of 2023, 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.”Recommended: Free Grants for Startups 2023How 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: How to Be Your Own BossThe Takeaway
In June 2023, the Bureau of Labor Statistics showed a national unemployment rate of 3.6%, which is slightly higher than the unemployment rate of 3.4% in May. Looking at the cities with the largest population in their respective states, our list showed that Baltimore, Maryland had the lowest unemployment rate among the larger U.S. cities and Las Vegas, Nevada, had the highest. This low jobless rate has various implications for the economy — and for small business owners.Small Business Loan Tips
- Generally, it can be easier for entrepreneurs starting out to qualify for a loan from an online lender than from a traditional lender. Lantern by SoFi’s single application makes it easy to find a small business loan offer from a lender.
- If you are launching a new business or your business is young, lenders will consider your personal credit score. Eventually, though, you’ll want to establish your business credit.
- If you need to borrow money to cover seasonal cash flow fluctuations, a business line of credit, rather than a term loan, provides the flexibility you likely need.
Photo credit: iStock/georgeclerk
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About the Author
Nancy Bilyeau
Nancy Bilyeau writes about student loans, mortgages, car insurance, medical debt and many other finance topics for Lantern. A veteran of the magazine business, she has edited stories on personal finance for Good Housekeeping and DuJour magazines and has written articles for The Wall Street Journal, Readers' Digest, Parade, Town & Country and Lifetime/A&E, among others. She is a graduate of the University of Michigan.
