The labor market continued to lose momentum in July, with total nonfarm payroll employment declining nationally and employment gains becoming more limited across states. While overall employment fell by 23,000 jobs, construction employment remained comparatively resilient, adding 22,000 jobs during the month.
In July, nonfarm payroll employment increased in 26 states and District of Columbia (D.C.) compared to June, while 24 states recorded declines. According to the Bureau of Labor Statistics, total U.S. nonfarm payroll employment fell by 23,000 jobs in July, following an increase of 20,000 jobs in June. Through July, monthly payroll gains have averaged 61,000 on the current data vintage, reflecting downward revisions to employment gains in prior months.
On a month-over-month basis, employment gains were led by Maryland and Illinois (+11,700), followed by Washington (+11,600) and Missouri (+8,100). In contrast, the 24 states that recorded losses collectively shed 122,100 jobs, with New Jersey posting the largest decline (-25,600). In percentage terms, Maryland recorded the strongest increase (+0.4%), while New Jersey experienced the largest decrease (-0.6%) between June and July.
Over the 12 months ending in July, total nonfarm employment increased by 316,000 jobs nationwide, representing a 0.2% gain. Job gains ranged from 1,200 in Hawaii and Vermont to 165,600 in Texas. Collectively, 14 states and D.C. lost 166,600 jobs over the past 12 months, with Virginia recording the largest decline (-47,900).
In percentage terms, job growth ranged from 0.1% in Arkansas and Wisconsin to 1.4% in Minnesota. Maryland and North Dakota reported no change over the past 12 months. Among states experiencing employment declines, losses ranged from 0.1% in Iowa, Kentucky, and Maine to 1.1% in Virginia and Montana. D.C., however, recorded a substantially larger decline of 4.2%.
Construction Employment
Construction employment 1—which includes both residential and non-residential construction, posted gains in July. Twenty-eight states added construction jobs compared to June, while 18 states and D.C. lost jobs; four states reported no change. Illinois recorded the largest monthly gain (+3,200), while Texas recorded the largest loss (-3,400). Overall, the construction sector added a net 22,000 jobs nationwide in July. In percentage terms, Mississippi recorded the strongest monthly increase (+1.9%), while West Virginia experienced the steepest decline (-2.8%).
Year-over-year, construction employment increased by 82,000 jobs nationwide, a 1.0% gain from July 2025. Texas led all states with an increase of 17,500 construction jobs, while California recorded the largest loss (-6,700). In percentage terms, Louisiana posted the strongest annual growth in construction employment (+11.4%), while Alaska experienced the largest decline (-3.7%).
State Unemployment Rate
The state unemployment rate is a key indicator of labor market conditions, measuring the share of the labor force that is actively seeking work but unable to find employment. Higher unemployment rates generally signal weaker economic conditions, while lower rates indicate tighter labor markets that may contribute to upward wage pressures.
South Dakota recorded the nation’s lowest unemployment rate at 2.0%, while D.C. posted the highest rate at 5.9%. The elevated unemployment rate in D.C. reflects significant federal workforce reductions and layoffs that occurred during 2025. North Dakota, Vermont, Hawaii, New Hampshire, Nebraska, and Wyoming also reported unemployment rates of 3.0% or below. Meanwhile, Nevada, Washington, California, Connecticut, and Oregon recorded unemployment rates of 5.0% or higher.