December’s jobs report showed a stall in the progress the U.S. has made toward reducing unemployment. The economy lost 140,000 nonfarm payroll jobs, mainly in the leisure and hospitality sectors which are vulnerable to shutdowns, after months of job gains. For comparison, we gained 245,000 jobs in November.
Now, the U.S. unemployment rate sits at 6.7%, which is still high but is much lower than the nearly historic high of 14.7% in April. This overall drop can be attributed in part to the fact that a lot more businesses are open now than were a few months ago, as states have gradually loosened restrictions. In addition, many people who became unemployed during the COVID-19 crisis were temporarily laid off, and either have already been rehired by their former employers or expect to be eventually. However, it will take far more time for us to reduce the unemployment rate to pre-pandemic levels than it did for the virus to reverse over a decade of job growth, especially considering December’s disappointing jobs report.
In order to identify the states whose unemployment rates are bouncing back most, WalletHub compared the 50 states and the District of Columbia based on four key metrics. We looked at the change in each state’s unemployment during the latest month for which we have data (December 2020) compared to December 2019 and January 2020. We also compared not seasonally adjusted continued claims in December 2020 to December 2019. Finally, we considered each state’s overall unemployment rate. Read on for the results, additional commentary from a panel of experts and a full description of our methodology.
Main Findings
States Whose Unemployment Rates Are Bouncing Back Most
| Overall Rank | State | Unemployment Rate (December 2020) | Change in Unemployment (December 2020 vs December 2019) | Change in Unemployment (December 2020 vs January 2020) | Not Seasonally Adjusted Continued Claims (December 2020 vs. December 2019) |
|---|---|---|---|---|---|
| 1 | South Dakota | 3.2% | -10.2% | -16.6% | 79.0% |
| 2 | Iowa | 3.3% | 3.2% | -17.6% | 69.5% |
| 3 | Nebraska | 2.8% | 4.6% | -12.9% | 251.1% |
| 4 | Vermont | 2.8% | 24.8% | -11.3% | 241.2% |
| 5 | Utah | 3.3% | 56.1% | 21.0% | 47.6% |
| 6 | Alabama | 3.7% | 45.0% | 14.3% | 54.0% |
| 7 | Arkansas | 4.0% | 19.2% | -1.8% | 91.1% |
| 8 | Montana | 4.5% | 22.5% | 0.2% | 83.2% |
| 9 | Wyoming | 4.6% | 26.4% | 7.7% | 89.3% |
| 10 | Indiana | 4.0% | 36.6% | 12.2% | 332.1% |
| 11 | North Dakota | 4.1% | 84.4% | 44.5% | 64.8% |
| 12 | Idaho | 4.5% | 59.3% | 30.2% | 52.6% |
| 13 | Minnesota | 4.6% | 27.3% | 21.5% | 150.2% |
| 14 | Delaware | 4.8% | 33.4% | 11.8% | 152.3% |
| 15 | Maine | 4.7% | 58.9% | 12.7% | 153.8% |
| 16 | New Hampshire | 3.8% | 59.2% | 17.0% | 502.6% |
| 17 | Kansas | 3.5% | 23.5% | 4.3% | 820.1% |
| 18 | Ohio | 5.2% | 35.0% | 1.2% | 170.7% |
| 19 | South Carolina | 4.6% | 88.4% | 51.2% | 170.4% |
| 20 | Alaska | 6.0% | -1.8% | -8.2% | 107.1% |
| 21 | Virginia | 4.7% | 85.0% | 47.8% | 247.2% |
| 22 | West Virginia | 6.1% | 17.6% | 6.7% | 40.7% |
| 23 | Wisconsin | 5.3% | 63.6% | 24.1% | 170.5% |
| 24 | Kentucky | 5.7% | 41.3% | 16.1% | 148.7% |
| 25 | Oklahoma | 5.2% | 63.7% | 59.5% | 160.2% |
| 26 | Mississippi | 5.9% | 12.8% | 11.8% | 250.5% |
| 27 | Missouri | 5.8% | 68.9% | 34.6% | 124.5% |
| 28 | Pennsylvania | 6.4% | 34.7% | 19.1% | 178.9% |
| 29 | North Carolina | 6.0% | 76.7% | 43.9% | 236.3% |
| 30 | Maryland | 6.0% | 91.7% | 62.0% | 200.1% |
| 31 | Oregon | 6.0% | 105.8% | 58.6% | 198.8% |
| 32 | Georgia | 5.4% | 84.0% | 53.8% | 556.3% |
| 33 | Tennessee | 6.2% | 103.7% | 67.1% | 158.3% |
| 34 | Louisiana | 6.9% | 38.4% | 19.1% | 319.6% |
| 35 | Florida | 5.8% | 121.7% | 89.2% | 337.4% |
| 36 | Washington | 7.2% | 75.7% | 58.1% | 175.6% |
| 37 | New Jersey | 7.4% | 100.8% | 64.6% | 63.9% |
| 38 | Arizona | 7.3% | 70.4% | 54.6% | 328.4% |
| 39 | Michigan | 7.3% | 98.4% | 64.6% | 239.2% |
| 40 | District of Columbia | 7.6% | 54.1% | 49.3% | 300.4% |
| 41 | Connecticut | 7.5% | 126.2% | 64.3% | 123.0% |
| 42 | Texas | 7.1% | 114.1% | 89.1% | 223.0% |
| 43 | Illinois | 7.5% | 109.8% | 82.5% | 214.4% |
| 44 | Massachusetts | 7.1% | 185.3% | 101.0% | 173.4% |
| 45 | New Mexico | 7.7% | 65.6% | 50.1% | 444.2% |
| 46 | Rhode Island | 7.7% | 136.1% | 86.3% | 147.2% |
| 47 | New York | 8.1% | 108.3% | 87.4% | 171.7% |
| 48 | California | 8.8% | 134.8% | 98.8% | 209.4% |
| 49 | Nevada | 9.0% | 154.5% | 122.2% | 353.4% |
| 50 | Colorado | 8.2% | 253.8% | 193.1% | 398.5% |
| 51 | Hawaii | 9.0% | 291.1% | 201.4% | 467.4% |
Ask the Experts
In order to provide further insight on U.S. unemployment and its recovery from the COVID-19 pandemic, WalletHub turned to a panel of experts. Click on the pictures of experts below to read their bios and responses to the following key questions:
- What are the best ways for state and local authorities to ensure a cost effective rebound from the economic aftermath of the pandemic?
- What are the most resilient industries and fields during the current crisis?
- What job skills do you think will be the most sought after in the post-coronavirus job market?
Ask the Experts
- Anne Marie Lofaso
J.D. – Arthur B. Hodges Professor of Law, West Virginia University
Read More
- Michael A. Leeds
Ph.D. – Professor of Economics, College of Liberal Arts, Temple University
Read More
- Bruce I. Sacerdote
Ph.D. – Professor of Economics, Arts & Sciences Faculty, Dartmouth College
Read More
- Peter Cappelli
George W. Taylor Professor, Professor of Management, Director, Center for Human Resources, Wharton School, University of Pennsylvania
Read More
- Stephanie Luce
Ph.D. – Professor and Department Chair, School of Labor and Urban Studies, Department of Sociology, The Graduate Center, City University of New York
Read More
- David C. Yamada
Professor of Law and Director, New Workplace Institute and Co-Director Employment Law, Suffolk University Boston
Read More
Methodology
In order to determine the states whose unemployment rates are bouncing back most, WalletHub compared the 50 states and the District of Columbia across two categories. In the first category, we compared the change in unemployment for the latest month for which we had data (December 2020) to both December 2019 and January 2020, in order to show the impact since last year and since the beginning of this year. We also compared not seasonally adjusted continued claims in December 2020 to December 2019. In the second category, we looked at the state’s overall unemployment rate. We then used the average of those categories to rank-order the states.
Change in Unemployment - Total Points: 50
- Change in Unemployment in December 2020 vs. December 2019: Full Weight (~16.67 Points)
- Change in Unemployment in December 2020 vs. January 2020: Full Weight (~16.67 Points)
- Not Seasonally Adjusted Continued Claims in December 2020 vs. December 2019: Full Weight (~16.67 Points)
Unemployment Rate - Total Points: 50
- Unemployment Rate (December 2020): Full Weight (~50.00 Points)
Sources: Data used to create this ranking were obtained from the U.S. Bureau of Labor Statistics and the U.S. Department of Labor.