The US State With The Lowest Unemployment Might Surprise You

According to the U.S. Bureau of Labor Statistics (BLS), the national nonfarm unemployment rate in August 2025 landed at 4.3%, slightly higher than July's 4.2%. Reuters listed reasons commonly cited by economists for the incrementally rising unemployment rates, and they include President Donald Trump's tariffs on imported goods, the large number of public worker firings, and the immigration clampdown. Unemployment, however, is not occurring equally in all states; in the Local Area Unemployment Statistics released by the BLS, the August numbers are broken down by state. The fact that federal public workers lost jobs in significant numbers explains the geographic location of the highest unemployment rate — in the District of Columbia, at 6%.  

Meanwhile, the nation's lowest unemployment rate — of just 1.9% — is in South Dakota. Besides boasting a rate that's 2.4% below the national average, this state is enjoying employment that's more than a half a percentage higher than the closest ranked states: North Dakota (the hardest-working U.S. state) and Vermont, both at 2.5%. Plus, percentagewise, South Dakota's unemployment remained the same from July to August. That said, according to the South Dakota Department of Labor and Regulation, the number of unemployed persons increased up by 300 (3.3%) in August. 

Employment rates in the state varied significantly by county, with Hamlin, Aurora, and Stanley counties at the lowest rate of 1.5%. Four counties, meanwhile, experienced unemployment rates of 6.5% or more: Oglala Lakota (6.5%), Dewey (6.8%), Corson (6.9%), and Todd (7.2%).

Tourism serves as an economic driver in the Mount Rushmore State. In 2024, according to the Economic Impact of Visitors in South Dakota report prepared by Tourism Economics, nearly 15 million people visited that year, spending $5.1 billion. This was a new high, up 2.8% from 2023. Year-over-year, the state added 800 (1.4%) jobs in the leisure and hospitality industry in hotels, restaurants, and more. 

The South Dakota Department of Labor and Regulation provided additional industry breakdowns. Both local and state governments added over 400 workers (1.2%) during August 2025, largely in educational services as the new school year began. The professional and business sector also grew that month, with 500 workers (1.3%) added to temporary staffing services, corporate offices, and more. Losses, however, took place in manufacturing, where the number of employed is down by 300 (0.7%); job numbers in banks and other financial institutions are also down by 300 (1.1%). As a caveat, these employment figures represent non-farm workers. Commodity, using Bureau of Economic Analysis GDP & Personal Income Regional Data, ranked South Dakota as having the largest farming share of the GDP in the United States; farming makes up 5.07% of the state's total employment. 

Besides being a great place to stay employed, South Dakota is also one of the cheapest states to retire. BestPlaces ranks its cost of living at 89.3 out of 100. South Dakota doesn't have a state income tax; with no sales tax on prescriptions and some medical devices, this can be an exceptionally senior-friendly place to live on a budget.