Short Answer
In June 2026, South Dakota again posted the lowest unemployment rate among U.S. states, at 2.0 percent, according to the U.S. Bureau of Labor Statistics. The national unemployment rate was 4.2 percent, and 17 states had jobless rates significantly below that level. The figures highlight a labor market that remains uneven across the country, with the Great Plains and parts of New England and the West showing especially tight conditions.
Key Numbers
- Lowest state unemployment rate: South Dakota, 2.0%
- Second lowest: North Dakota, 2.3%
- Tied for third lowest: Hawaii and Vermont, 2.6%
- National unemployment rate: 4.2%
- States below the national rate: 17
- States and D.C. above the national rate: 9 (8 states plus the District of Columbia)
- Highest rate: District of Columbia, 6.0%
- Year-over-year increases: 13 states; decreases: 7 states
Explanation
The unemployment rate measures the share of the labor force that is actively looking for work but cannot find a job. State unemployment rates are calculated from the same monthly household survey used for the national rate, but they are adjusted to reflect local labor market conditions. The Bureau of Labor Statistics publishes seasonally adjusted state rates to remove predictable seasonal swings, such as summer hiring in tourism or winter slowdowns in construction.
In June 2026, the U.S. unemployment rate was 4.2 percent, little changed from May and from a year earlier. But state rates varied widely. South Dakota’s 2.0 percent rate was less than half the national figure, while the District of Columbia’s 6.0 percent rate was the highest in the country. Low unemployment generally signals strong demand for workers, but it can also reflect a shrinking labor force or an economy dominated by industries with stable year-round employment.
For states with the lowest jobless rates, the numbers often reflect a combination of favorable demographics, industry mix, and regional economic conditions. The BLS data for June 2026 show that the lowest rates were concentrated in the Upper Midwest, the Mountain West, and parts of New England and the Pacific.
Ranking Table
The table below shows the 15 states with the lowest seasonally adjusted unemployment rates in June 2026, based on preliminary BLS data.
| Rank | State | Unemployment Rate (June 2026) |
|---|---|---|
| 1 | South Dakota | 2.0% |
| 2 | North Dakota | 2.3% |
| 3 (tie) | Hawaii | 2.6% |
| 3 (tie) | Vermont | 2.6% |
| 5 (tie) | Nebraska | 2.9% |
| 5 (tie) | New Hampshire | 2.9% |
| 7 | Maine | 3.1% |
| 8 (tie) | Alabama | 3.2% |
| 8 (tie) | Iowa | 3.2% |
| 8 (tie) | Wyoming | 3.2% |
| 11 (tie) | Indiana | 3.3% |
| 11 (tie) | Montana | 3.3% |
| 11 (tie) | Wisconsin | 3.3% |
| 14 | Georgia | 3.4% |
| 15 | Tennessee | 3.5% |
State Comparison
Among the lowest-unemployment states, the top five show a mix of geographic regions. South Dakota and North Dakota have long benefited from strong agricultural and energy sectors, while Hawaii and Vermont have relatively small labor forces and tourism-driven economies that can produce very low jobless rates during peak seasons. Nebraska and New Hampshire round out the top tier, both with rates below 3 percent.
- South Dakota (2.0%): The lowest rate in the nation, unchanged from its position as a perennial low-unemployment state.
- North Dakota (2.3%): The second-lowest rate, reflecting a tight labor market in the Upper Midwest.
- Hawaii and Vermont (2.6%): Tied for third, both small states with distinct seasonal employment patterns.
- Nebraska and New Hampshire (2.9%): Tied for fifth, with rates well below the national average.
National Comparison
The national unemployment rate in June 2026 was 4.2 percent. According to the BLS, 17 states had unemployment rates significantly lower than the U.S. figure, 8 states and the District of Columbia had higher rates, and 25 states had rates that were not appreciably different from the national rate. The District of Columbia had the highest unemployment rate at 6.0 percent, more than three times South Dakota’s rate.
“South Dakota had the lowest unemployment rate among the states, 2.0 percent in June 2026. The District of Columbia had the highest unemployment rate, 6.0 percent.” — U.S. Bureau of Labor Statistics, The Economics Daily
Year-over-Year Change
Compared with June 2025, unemployment rates rose in 13 states, fell in 7 states, and were little changed in 30 states and the District of Columbia. The largest increases were in Connecticut (+1.3 percentage points), Arizona (+0.6 points), and Alabama (+0.3 points). The largest decreases were in California (-0.3 points), Alaska (-0.2 points), Colorado (-0.1 points), and the District of Columbia (-0.2 points).
| State | June 2025 Rate | June 2026 Rate | 12-Month Change (percentage points) |
|---|---|---|---|
| Connecticut | 3.9% | 5.2% | +1.3 |
| Arizona | 4.3% | 4.9% | +0.6 |
| Alabama | 2.9% | 3.2% | +0.3 |
| California | 5.5% | 5.2% | -0.3 |
| Alaska | 4.6% | 4.4% | -0.2 |
| District of Columbia | 6.2% | 6.0% | -0.2 |
| Colorado | 4.0% | 3.9% | -0.1 |
Factors Behind the Trend
Several factors help explain why some states consistently report lower unemployment rates than others. States with strong agriculture, energy, and manufacturing sectors, such as South Dakota, North Dakota, Nebraska, and Iowa, often have stable demand for workers and lower labor force churn. Smaller states may also have less diverse economies, which can lead to very low unemployment when their dominant industries are doing well.
Demographics also play a role. States with older populations or slower population growth may have fewer new entrants to the labor force, which can hold down the unemployment rate. Conversely, states with fast-growing populations, such as Arizona and Florida, may see higher unemployment as more people enter the labor market looking for work. Seasonal adjustment is important because states like Hawaii and Vermont have large tourism sectors that create predictable seasonal swings in employment.
How the Statistic Is Calculated
State unemployment rates are produced by the BLS through the Local Area Unemployment Statistics (LAUS) program. The rates are based on the Current Population Survey (CPS), a monthly survey of about 60,000 households, combined with data from state unemployment insurance systems and other sources. The unemployment rate is the number of unemployed people divided by the total labor force (employed plus unemployed), expressed as a percentage.
For state-level estimates, the BLS uses statistical models to improve reliability because the CPS sample is relatively small for individual states. The rates are seasonally adjusted to remove regular seasonal patterns, such as summer hiring or winter layoffs, making month-to-month comparisons more meaningful. The June 2026 state rates are preliminary and may be revised in future releases.
Limitations of the Data
State unemployment rates are subject to several limitations. First, the figures are preliminary and can be revised as more complete data become available. Second, the CPS sample is smaller at the state level than at the national level, so state estimates have wider margins of error. Third, the unemployment rate does not capture underemployment—people working part-time who would prefer full-time work—or discouraged workers who have stopped looking for a job. Finally, seasonally adjusted rates are estimates and may not perfectly reflect local conditions in every month.
Why It Matters
State unemployment rates are a key indicator of local economic health. Low unemployment generally means that workers have more bargaining power, wages may rise, and businesses may face challenges finding qualified employees. For policymakers, low unemployment can signal a need for workforce development or housing policies to attract workers. For individuals, the state unemployment rate can influence decisions about where to live, work, or start a business. The June 2026 data show that while the national labor market is stable, conditions vary widely from state to state.
Source & Data Date
The primary source for this article is the U.S. Bureau of Labor Statistics (BLS), State Employment and Unemployment (Monthly) News Release, published July 21, 2026, covering June 2026 data. Additional data come from the BLS Unemployment Rates for States table and the BLS The Economics Daily article “South Dakota had the lowest jobless rate in June 2026.” All figures are seasonally adjusted unless otherwise noted.
FAQ
Which state had the lowest unemployment rate in June 2026?
South Dakota had the lowest unemployment rate among U.S. states in June 2026, at 2.0 percent, according to the Bureau of Labor Statistics. North Dakota was second at 2.3 percent, and Hawaii and Vermont tied for third at 2.6 percent.
How does the national unemployment rate compare to the lowest states?
The national unemployment rate in June 2026 was 4.2 percent. South Dakota's rate of 2.0 percent was less than half the national figure. In total, 17 states had unemployment rates significantly lower than the U.S. rate, while 8 states and the District of Columbia had higher rates.
What is the difference between seasonally adjusted and not seasonally adjusted unemployment rates?
Seasonally adjusted rates remove predictable seasonal patterns, such as summer hiring in tourism or winter slowdowns in construction, to make month-to-month comparisons more meaningful. Not seasonally adjusted rates reflect the raw data without these adjustments and can show large seasonal swings.
Why do some states have much lower unemployment than others?
Low unemployment in certain states often reflects a combination of strong industries such as agriculture, energy, or manufacturing; slower population growth; older demographics; and stable year-round employment. Smaller states with less diverse economies can also experience very low jobless rates when their dominant sectors are thriving.
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