New federal data shows where America’s job market is tightest — and the Dakotas are leading the nation. South Dakota posted a 2.0% unemployment rate in August 2026, the lowest of any state, according to the U.S. Bureau of Labor Statistics. North Dakota followed at 2.2%, and Vermont rounded out the top three at 2.6%. The national unemployment rate sat at 4.1% in the same month, meaning 19 states ran below the national figure.
TL;DR: South Dakota (2.0%) and North Dakota (2.2%) have the lowest unemployment rates in the country in the BLS’s August 2026 data, released September 18, 2026. The top 10 list is dominated by Midwestern and Mountain West states, with five states tied at 3.2%. All figures are seasonally adjusted preliminary estimates from the BLS Local Area Unemployment Statistics program.
1. South Dakota — 2.0%
South Dakota holds the nation’s lowest jobless rate at 2.0%, unchanged from the prior month, per the BLS August 2026 state employment release. The headline masks a smaller labor pool: the state’s seasonally adjusted labor force fell to 485,900 people, with 9,600 residents counted as unemployed, according to the state Department of Labor and Regulation. Low doesn’t mean booming — both employment and unemployment edged lower.
2. North Dakota — 2.2%
North Dakota comes in second at 2.2%, matching its second-place rank in the BLS state unemployment rankings. That’s down four-tenths of a point from 2.6% in August 2025, one of the bigger year-over-year improvements among low-rate states. The state’s energy and agricultural sectors continue to underpin one of the tightest labor markets in the country.
3. Vermont — 2.6%
Vermont ranks third at 2.6%, unchanged from August 2025. The Green Mountain State has been a perennial presence near the top of the BLS low-unemployment list, and its August reading keeps it there.
4. Hawaii — 2.7%
Hawaii sits fourth at 2.7% in the August 2026 BLS data. That’s up from 2.1% a year earlier — the sharpest year-over-year rise among the 10 lowest-rate states — a reminder that even tight markets can loosen. (See our look at America’s 10 cheapest cities to live in 2026 for where low costs meet available jobs.)
5. New Hampshire — 2.8%
New Hampshire rounds out the top five at 2.8%, per the BLS state rankings table. The Granite State’s rate is down from 3.1% in August 2025, making it one of the few top-10 states whose rate improved over the year.
6. Nebraska — 2.9%
Nebraska holds sixth place at 2.9%, unchanged from a year ago. Cornhusker State job seekers face one of the most employer-friendly markets for workers in America — fewer applicants competing for each opening than almost anywhere else.
7. Wyoming — 3.0%
Wyoming ranks seventh at 3.0% in the August 2026 release. That’s down from 3.3% a year earlier, a solid improvement driven by the state’s energy and tourism mix.
8. Georgia — 3.2%
Georgia ties for eighth at 3.2%, down from 3.4% in August 2025. The Peach State is the largest state economy on this list — a low rate here carries more weight than in smaller states because it reflects hundreds of thousands of filled jobs.
9. Iowa — 3.2%
Iowa matches Georgia at 3.2%, also down from 3.5% a year earlier. Midwest agriculture and manufacturing states have a strong grip on the bottom of this chart.
10. Maine — 3.2%
Maine completes the top 10 at 3.2%, edging down from 3.3% in August 2025. Note the tie: Montana and Wisconsin are also at 3.2% in the August data, meaning they share the BLS’s No. 8 ranking but land just outside a strict top-10 cutoff.
How these rankings were built
Every rate above comes directly from the U.S. Bureau of Labor Statistics’ Local Area Unemployment Statistics (LAUS) program, specifically the August 2026 state employment and unemployment release (USDL-26-1515), published September 18, 2026, and the accompanying state rankings table. The figures are seasonally adjusted, refer to a person’s place of residence rather than workplace, and are preliminary — BLS revises the current month’s estimates when the next release comes out.
The list uses standard competition ranking, the same convention BLS uses: tied states share a rank, so five states at 3.2% are all No. 8. The District of Columbia is excluded from this list because it is not a state — though worth noting it had the highest unemployment rate in the release at 5.7%. Among actual states, California, Connecticut, and Oregon tied for the highest rate at 5.1%.
What the numbers actually mean
A low unemployment rate is a measure of scarcity, not prosperity. The rate is the share of the labor force — people working or actively looking — who are jobless, not the share of all residents. A state can post a low rate while its total workforce shrinks, which is exactly what happened in South Dakota: the labor force dropped by 1,200 in August and by 7,200 over the year even as the 2.0% rate held steady.
Also note the timing: August estimates are preliminary and get revised, and unemployment says nothing about wages or job quality. A 2.0% rate with flat pay growth is a very different labor market than a 3.2% rate with rising earnings. Still, for job seekers, these rankings answer a simple question — where is the competition for work thinnest? — and the answer in August 2026 is overwhelmingly the northern Midwest and Mountain West.
Frequently asked questions
Which state has the lowest unemployment rate in 2026?
South Dakota. The BLS reported a 2.0% seasonally adjusted unemployment rate for the state in August 2026, the lowest of any state in the country.
Where does the BLS get state unemployment data?
The rates come from the Local Area Unemployment Statistics (LAUS) program, which models estimates largely from the Current Population Survey of households, plus administrative data like unemployment insurance claims.
Are these unemployment rates seasonally adjusted?
Yes. All the rates in this article are the BLS’s seasonally adjusted figures, which smooth out predictable seasonal swings like summer hiring and holiday retail.
Which state has the highest unemployment rate?
The District of Columbia posted the highest rate overall at 5.7%, but it is not a state. Among the 50 states, California, Connecticut, and Oregon tied for the highest rate at 5.1% in August 2026.
Did any state set an unemployment record in August 2026?
Yes — Ohio’s 3.3% rate set a new series low, according to the BLS. State unemployment series begin in 1976.
Why do five states tie at 3.2%?
Georgia, Iowa, Maine, Montana, and Wisconsin all rounded to 3.2% in August 2026. BLS uses standard competition ranking, so all five share the No. 8 rank; only the first three alphabetically appear in the strict top-10 list above.
How do these rates compare to last year?
Most top-10 states improved or held steady. North Dakota fell from 2.6% to 2.2%, while South Dakota ticked down from 2.1% to 2.0%. Hawaii moved the other way, rising from 2.1% to 2.7%.
Are these numbers final?
No. BLS labels current-month state estimates as preliminary and revises them with the following month’s release. Estimates for the last several years can also be revised during annual benchmarking.
When will the next state unemployment data come out?
BLS publishes state employment and unemployment figures roughly monthly, typically a few weeks after the reference month ends. Check the BLS LAUS release calendar for the exact date.
