While most of the U.S. has enjoyed relatively low unemployment, many Western states have struggled with above-average jobless rates. California and Nevada both had unemployment levels of 5.2% as of June, ranking them at the bottom of all 50 states, according to the U.S. Bureau of Labor Statistics. That compared with the national average of 4.1%. Only Washington, D.C., had a higher rate, at 5.3%.
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One recent economic forecast from BMO Economics projected that California’s unemployment rate would average 5.5% for the full year and increase to 5.6% in 2025. High housing costs, declining population, and looming government budget deficits will pressure the state’s economy in the near term, the report said.
Washington also has been facing rising unemployment, which reached 4.9% in June, compared with 3.8% in June 2023. Job growth has actually been stronger than expected, however, according to the state’s Economic and Revenue Forecast Council. The Council reported mixed economic signals, with above-average inflation, particularly in the Seattle area, and a slowdown in wage growth.
Arizona, by contrast, has shown more signs of economic strength. The state’s June unemployment rate of 3.3% was well below the national average, as Arizona continues to see expansion in the health care, leisure and hospitality, wholesale trade, professional/technology and construction industries, according to a recent report from Arizona State University. In fact, Arizona has led the nation with $40 billion in new investments in the semiconductor industry alone since 2021, the report found.
