These American Cities Are Thriving, Some With Unemployment Rates Under Below 2%

Unemployment is one of the most important and closely watched economic indicators — and for good reason. Seen as a gauge for the strength of the country’s job market, the official unemployment rate reflects the share of Americans aged 16 and older who are out of work, despite actively seeking a job. At the individual […] The post These American Cities Are Thriving, Some With Unemployment Rates Under Below 2% appeared first on 24/7 Wall St..

Jun 24, 2025 - 18:18

These American Cities Are Thriving, Some With Unemployment Rates Under Below 2%

Unemployment is one of the most important and closely watched economic indicators — and for good reason. Seen as a gauge for the strength of the country’s job market, the official unemployment rate reflects the share of Americans aged 16 and older who are out of work, despite actively seeking a job. At the individual level, the adverse effects of unemployment can extend well beyond financial concerns. At the broader, macroeconomic level, high unemployment can trigger a cascade of negative consequences.

Key Points

The strength of the U.S. economy is inextricably linked to the health of the American job market, and in recent years, economic growth has been fueled, in part, by historically low unemployment rates.
Labor market conditions are influenced by a wide range of global, national, and local factors, however, and as a result, there are cities and towns across the country where jobless rates are lower than have ever been across the country as a whole.
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Americans who are unemployed are at increased risk of eviction, and those out of work for at least six months are exposed to far greater than average risk of poverty. According to the U.S. Department of Health and Human Services, rates of depression, anxiety, and stress-related illnesses like stroke or heart attack are also far higher among the unemployed than they are among working Americans.

Unemployment also has implications for the economy at large, and at high enough levels, joblessness can negatively impact working Americans. In today’s economy, a single percentage point increase in the unemployment rate represents the loss of nearly 1.7 million jobs. That means 1.7 million households with lost wages and 1.7 million fewer workers contributing to economic output. Reduced productivity and consumer spending have ripple effects throughout the economy, often leading to further workforce reductions and potentially fueling an economic contraction or prolonged recession.

Encouragingly, the U.S. job market has experienced a period of historic strength in recent years. After hitting 8.1% in 2020, the first year of the COVID-19 pandemic, the average annual unemployment rate fell to 5.3% in 2021. In both 2022 and 2023, the annual jobless rate hit its lowest level since the 1960s, at just 3.6%. (Here is a look at the U.S. presidents who oversaw the best job markets in American history.)

While the annual unemployment rate climbed again in 2024, at 4.0%, joblessness in the U.S. remains low by historical standards. But even though the American job market is relatively healthy, there are cities and towns across the country where unemployment rates are lower than they have ever been nationwide.

Using data from the Bureau of Labor Statistics, 24/7 Wall St. identified the best local job market in every state. Rankings are based on average unemployment rates in 2024. We considered each of the nearly 2,000 U.S. cities and towns with available data from the BLS’ Local Area Unemployment Statistics program. It is important to note that in two states — Hawaii and Vermont — the LAUS covers only a single city. As a result, the listed city in these states ranks as the best local job market by default. Data on median household income are five-year average estimates from the U.S. Census Bureau’s 2023 American Community Survey. All other supplemental data is from the LAUS.

Among the 50 cities and towns on this list, 2024 unemployment rates range from 4.2% to just 1.7%. In each of these places, the local jobless rate is anywhere from 0.1 to 2.7 percentage points lower than the comparable statewide unemployment rate.

Low unemployment typically indicates a greater number of wage earners, and, as a result, household incomes tend to be relatively high in these places. Of the 50 cities and towns on this list, 39 have a higher median household income than the state as a whole, often by tens of thousands of dollars. Higher household earnings can fuel consumer spending, which in turn can create employment opportunities and drive a virtuous economic cycle. (Here is a look at the 30 American jobs that may vanish in the next 10 years.)

These are the best local job markets in each state.

Why It Matters

Few economic indicators have greater implications for working Americans and the economy as a whole than the unemployment rate. Rising unemployment can drive downward economic spirals, while falling unemployment can mean a reduced likelihood of financial hardship for American households and more rapid national economic growth. The U.S. is currently in a period of historically low unemployment, and there are parts of the country where unemployment rates are below anything that has ever been reported nationwide.