MONTGOMERY Ala. (WBMA) – Alabama’s unemployment rate rose to 3.5% in September, its highest level since June 2021, as the number of people counted as unemployed increased over the year.
The preliminary, seasonally adjusted rate was up from 3.4% in August and 2.8% in September 2025, according to the Alabama Department of Workforce. The last time the state’s rate was 3.5% or higher was June 2021.
The state counted 82,075 people as unemployed in September, up from 80,550 in August and 65,692 a year earlier. The number of people counted as employed fell by 2,080 over the month, to about 2.28 million. Alabama’s civilian labor force also declined by 555 people, to about 2.36 million.
Peter Brummund, an associate professor of economics at the University of Alabama, said the increase in unemployment suggests job seekers may be having a harder time finding work.
“On the face of it, it does appear that … workers in Alabama are having a harder time finding jobs,” Brummund said. “Other things to look for would be length of the duration of unemployment.”
At the same time, a separate survey of employers showed wage and salary jobs increased by 24,300 over the year, reaching about 2.22 million. The largest gains were in leisure and hospitality, which added 10,200 jobs; private education and health services, up 7,300; and professional and business services, up 6,800.
Private education and health services employment reached a record 272,000 jobs, the department said.
The state’s unemployment rate is based on a household survey that counts people who are working or looking for work. The job-growth figures come from a separate survey of employers, which counts positions. The two measures can move in different directions.
Brummund said other measures can help give a fuller picture of the labor market, including underemployment, which can include people working part time who would prefer full-time work.
“You prefer a full-time job if you could find it,” he said.
“What these numbers show us is that the people who can and should be working, are working,” Workforce Secretary Greg Reed said in a news release.
Alabama’s prime-age labor force participation rate, the share of people ages 25 to 54 who are working or looking for work, rose to 79.5%, up from 78.4% a year earlier. Of people not counted in the labor force, 61.7% were 55 or older.
Shelby, Limestone and Chambers counties had the lowest unemployment rates among Alabama counties, at 3%. Perry County had the highest rate, at 6.6%.
Among major cities, Pelham had the lowest rate, at 2.6%, followed by Vestavia Hills at 2.8%. Prichard had the highest rate, at 7%.