With the U.S. losing 140,000 jobs in December but the national unemployment rate holding at 6.7% compared to the nearly historic high of 14.7% at the peak during the coronavirus pandemic, WalletHub released updated rankings for the States Whose Unemployment Rates Are Bouncing Back Most.
To identify the states with the best recovery in unemployment, WalletHub compared the 50 states and the District of Columbia based on four key metrics. According to a WalletHub news release, it looked at the change in each state’s unemployment during the latest month for which it has data (December 2020) compared to December 2019 and January 2020.
It also compared not seasonally adjusted continued claims in December 2020 to December 2019. Finally, it considered each state’s overall unemployment rate.
Below, you can see highlights from the report:
For instance one of the hardest-hit states is California, according to the study:
Unemployment Recovery in California (1=Most Recovered, 25=Avg.):
- 76%Change in Unemployment (December 2020 vs December 2019)
- 1,669,625 unemployed people in December 2020 vs 711,206 in December 2019;
- 6th worst recovery in the U.S.
- 77%Change in Unemployment (December 2020 vs January 2020)
- 1,669,625 unemployed people in December 2020 vs 839,986 in January 2020;
- 5th worst recovery in the U.S.
- 39%Change in Not Seasonally Adjusted Continued Claims (December 2020 vs December 2019)
- 1,006,699 continued claims in December 2020 vs 325,387 in December 2019
- 21st worst recovery in the U.S.
- 8%Unemployment Rate (December 2020)
- 3rd highest unemployment rate in the U.S.
One question WalletHub tackled was how concerned should we be that the economy lost jobs in December?
“We should be slightly concerned that the economy lost jobs in December since it was the first time in eight months that we didn’t see growth. The drop was relatively small, though, and the overall unemployment rate remained steady at 6.7%,” said Jill Gonzalez, WalletHub analyst in the news release. “We should be more concerned if the losses continue. The best way to achieve job gains in the future is to support vaccination efforts as much as possible because we cannot get the economy fully back on track until a significant portion of the population is vaccinated.”
Is there a big difference in the unemployment rate among various demographics?
“The unemployment rate does differ sharply among different demographics. The unemployment rate for white people is 5.9 percent, while it’s much higher, at 9.3 percent, for black people. The racial disparity is troubling, especially in the context of broader discussions of inequality that have taken place in the past year,” Gonzalez added. “The unemployment rate can fluctuate a lot by age, too; it’s only 5.3 percent for those ages 45 to 54, but 11.2 percent for people ages 20 to 24. It makes sense that people who have been in the workforce longer would have more job stability, but we should be concerned about the difficult conditions faced by young people.”
Many Americans have been unemployed for six months or more. Gonzalez offered some financial tips for people who fall into the long-term unemployment bracket.
“People who are unemployed for six months or more should first make sure they have exhausted all benefits or resources available to them, as some states may offer extended unemployment benefits,” she said in the news release. “People who have run out of benefits and can’t fall back on savings should look critically at their spending and temporarily cut out anything non-essential, as well as look into whether they can get temporary relief on their bills through the biller’s hardship program. Some people may need to borrow money, but should avoid extremely costly options like payday loans unless necessary.”
And if you are curious about which state has experienced the biggest decrease in unemployment vs. the beginning of the year, Gonzalez said Iowa.
“Iowa has experienced the biggest decrease in unemployment because it has seen an 18% decrease in the number of unemployed persons from January 2020 to December, compared to the average increase of 44%,” she said. “Iowa’s overall unemployment rate is 3.3%, compared to the average of 6.7%.”
To view the full report and your state’s rank, please click here.