All labor markets are local
Nationally, the unemployment rate is low, at 4.2%. But it’s much higher in some parts of the country than others.

Recently, the president fired the commissioner of the Bureau of Labor Statistics over the most recent jobs report, which was not so great.
But even though that report showed hiring is much slower than previously realized, the unemployment rate is still pretty low — at 4.2%.
That’s nationally, anyway. The Labor Market is often talked about like it’s just one thing, but it is not. It is made up of many different labor markets, in cities and states around the country. And they can vary a lot.
Right now, for example, in South Dakota, where unemployment is less than 2%, one might feel like the labor market is a whole lot better than Washington DC, where it’s 6%. Or in California and Nevada, where it’s right around 5.5%.
If you’re the Federal Reserve, or an economist trying to understand what’s happening in this economy, you care most about national unemployment data.
But Layla O’Kane, at the nonprofit Opportunity@Work, said if you’re just a person looking for a job, you probably care more about what’s happening where you live.
“Labor markets are local, and local dynamics matter a lot for communities,” O’Kane said.
Right now, for example, the labor market overall is still pretty solid but certain industries are not.
“You've seen professional and business services and information layoffs up in June, and so that tech industry is just a little bit shaky right now,” O’Kane said.
That’s hurting the labor market in California where a lot of tech is based.
D.C. has its own set of problems.
“Federal workers have obviously been laid off at high rates due to Trump administration policies,” O’Kane said. “And then there's also some decline in international tourism in DC and in probably local tourism as well.”
That is also affecting the job market there.
Economist Kathryn Anne Edwards said there are other factors less specific to this moment in time that also play a role.
“You frequently see low unemployment rates in some low population states that have some pretty lucrative industries,” Edwards said. “So, think of the Dakotas. South Dakota has one of the lowest unemployment rates in the country, as does North Dakota, but also it's a really small state that has some dominant industries in play.”
What’s happening at the national level does trickle down said Heidi Shierholz, at the Economic Policy Institute.
“If we enter a recession, unemployment really across the board rises,” Shierholz said. “When we enter a recovery, unemployment across the board tends to fall.”
So even though state unemployment rates might be very different — they tend to move in tandem.
“If the overall unemployment rate in the United States continues to rise as it has been, there will still be differences in unemployment rate levels from state to state,” Shierholz said.
But she said unemployment will rise virtually everywhere.


