While unemployment levels have remained relatively stable over the past year, certain states are seeing higher numbers of new claims than others.
A new WalletHub report ranked states where claims were decreasing the most as national unemployment claims dropped by 1.3 percent in early August.
Why It Matters
Roughly 7.2 million Americans are unemployed, with the job market, location and individual circumstances all playing a role.
States with higher unemployment rates typically have a more difficult job market to navigate, as well as fewer opportunities and industries. However, the cost of living in larger cities and states with more ideal job markets can keep many employees out of a job.
The map shows the states where unemployment claims have been decreasing the most.
What To Know
WalletHub’s report found that the top five states where unemployment claims were decreasing the most were Iowa, Arkansas, Alabama, Montana and Wisconsin.
Completing the top 10 were Louisiana, Maine, Arizona, New Hampshire and Indiana.
Many of the states with fewer new jobless claims, like Iowa, were heavily agricultural, with an aging population, said Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast.
“The labor pool there is shrinking as more people retire, so fewer jobless claims shouldn’t come as a shock,” Thompson told Newsweek.
Twenty-four states, including Rhode Island, Oregon and Wyoming, and the District of Columbia had more unemployment claims than the same week the year before.
“Due to the negative impacts of tariffs, and AI, I expect to see unemployment rates tick higher for the rest of 2025,” Ernie Goss, a professor of economics at Creighton University, said in the report. “This is already the case for recent college graduates. It will continue to be more challenging for college graduates with higher jobless rates.”
A sign advertising Pioneer seed products sits in front of a cornfield on August 10, 2024, near Osage, Iowa.
A sign advertising Pioneer seed products sits in front of a cornfield on August 10, 2024, near Osage, Iowa.
Scott Olson/Getty Images
What People Are Saying
Kevin Thompson told Newsweek: “The job market is softening across the country. The larger economies—New Jersey, California, New York—will feel it more acutely because of their size and outsized impact on GDP. Smaller states, with fewer people and more insulated economies, won’t move the national needle as much, but they aren’t immune either.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Not all news is good, as 24 states and the District of Columbia actually saw claims that were worse than a year ago. We continue to see concern that the labor market isn’t growing as quickly as it has in recent years, as worries over tariffs and falling demand for some items take hold.”
Cathy Carey, a professor of economics at the University of Southern Indiana, in the report: “While low and falling unemployment rates might suggest leverage for employees, the overall hiring dynamic is more nuanced. Many employers are regaining ground by requiring more in-person work, which will reverse some of the flexibility gained during the pandemic. Still, it varies significantly by industry. Cultural shifts in the workforce and new fiscal policies aimed at encouraging work may also influence the balance. I do not see a clear tilt in either direction overall—the hiring dynamic depends heavily on sector, role, and region.”
What Happens Next
Experts say the 24 states experiencing higher unemployment claims could reflect larger economic distress in the coming months.
“The real question is are the 24 states seeing these worsening unemployment outlooks part of a broader trend that could consume other states or not,” Beene said. “That remains to be seen.”