New unemployment claims decreased by 2.6% week-over-week on August 29 amid high inflation and the threat of a recession. To help add some context to these statistics, WalletHub just released updated rankings for the States Where Unemployment Claims Are Decreasing the Most, along with accompanying videos and audio files.
- 23 states and the District of Columbia had unemployment claims last week that were lower than in the previous week: Vermont, New Hampshire, Michigan, Connecticut, Mississippi, New York, South Carolina, Alabama, West Virginia, Arkansas, Louisiana, Delaware, Maryland, Rhode Island, Oregon, Montana, Missouri, Maine, North Carolina, Florida, New Jersey, Wyoming, and Tennessee.
- Surprisingly, five states – South Carolina, Kentucky, Oklahoma, Connecticut, and Arizona – had unemployment claims last week that were worse than the same week last year.
- Every state had unemployment claims last week that were lower than in the same week pre-pandemic (2019) except for Oklahoma, Indiana, Connecticut, Colorado, Ohio, Utah, Virginia, Kentucky, Hawaii, Alaska, Minnesota, Texas, Rhode Island, California, Georgia, Alabama, Michigan, and Idaho.
|Decreased Most Last Week||Decreased Least Last Week|
|1. New Hampshire||42. New York|
|2. Maryland||43. Nevada|
|3. Delaware||44. California|
|4. Louisiana||45. Hawaii|
|5. Mississippi||46. Connecticut|
|6. Vermont||47. Indiana|
|7. North Dakota||48. Alaska|
|8. Nebraska||49. Kentucky|
|9. New Mexico||50. Oklahoma|
|10. Michigan||51. Massachusetts|
To view the full report and your state’s rank, please visit: https://wallethub.com/edu/states-unemployment-claims/72730
Ahead of the Fed’s September meeting, how will inflation affect unemployment?
“At the Fed’s September meeting, all eyes will once again fall on inflation, which will also affect unemployment. The jobs numbers are predicted to remain strong,” said Jill Gonzalez, WalletHub Analyst. “But the ongoing labor shortage could keep contributing to inflation, which will most likely lead to more interest rate hikes. The Fed uses these hikes to destress the economy and hopefully curb inflation. And sooner or later, the Fed’s actions will increase unemployment numbers.”
How will the Fed’s most recent interest rate hike affect unemployment?
“The Fed’s most recent interest rate hike will affect unemployment. Essentially, higher interest rates might lower consumer spending and business investments, which could lead to a reduction in hiring and an increase in unemployment,” said Jill Gonzalez, WalletHub Analyst. “Since the cost of borrowing will also now be higher, it could also have a direct impact on employees’ personal finances. Combined, it’s not a very good outlook in terms of unemployment numbers in the short term.”
How would a potential recession affect unemployment?
“A potential recession would negatively affect unemployment significantly. Losing a job is never good, but when you combine it with such high inflation it can really become disastrous,” said Jill Gonzalez, WalletHub Analyst. “Even Americans with jobs right now are struggling to afford essentials like food and gas. If those numbers to climb while more people become unemployed, we might see an economy in deep recession.”
What do you make of the fact that there are more job openings than there are unemployed Americans?
“Unemployment is really no longer an issue since the country has recovered from much of the fallout of the pandemic,” said Jill Gonzalez, WalletHub Analyst. “The next step might be looking to open up immigration to fill the surplus of jobs nationwide. Doing so would not only help businesses meet their needs, but would also drive additional economic growth.”
How do red states and blue states compare when it comes to new unemployment claims?
“With an average rank of 25 among the states with the biggest decreases in unemployment claims, red states fared better last week than blue states, which rank 27 on average,” said Jill Gonzalez, WalletHub analyst. “The lower the number of the ranking, the bigger the decrease in the state’s new unemployment claims was.”
How has unemployment in the West South Central states – the division with the highest inflation growth in the past 12 months – been impacted?
“Among West South Central states, Arkansas’ unemployment claims have experienced the 26th biggest decrease in the U.S. For the week of August 29, Arkansas had 1,262 new unemployment claims, a 13% decrease from the previous week. On the other hand, unemployment claims in Oklahoma have experienced a 98% increase for the same period.”