10 U.S. Cities With the Lowest Unemployment Rates

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It’s been three years since the recession ended, and many people are still feeling the effects of the worst economic downturn since the Great Depression. The unemployment rate for May 2012 stood at 8.2 percent, and analysts say that figure understates the problem, as it doesn’t include people who have given up looking for work; they believe the “real” unemployment mark is somewhere around 14 percent. On the other hand, there are a number of areas around the U.S. that are prospering, with unemployment rates in the low single digits. Here’s a look at the 10 U.S. metropolitan areas with the lowest unemployment rates as of May 2012.


10. Portsmouth, New Hampshire

Portsmouth, N.H., has a diversified community.

The historic North Church in Portsmouth; Captain Tucker

This historic seaport had only 4.1 percent unemployment in May 2012 (unemployment figures for all 10 metro areas are listed at the end of the story). The area’s biggest employer has been around quite a while — the Portsmouth Naval Shipyard, built in 1800, employs more than 4,000 workers. It’s not the only federal presence in town, as the U.S. Department of State employs hundreds of workers to process visas and passports. As in many cities, the local health-care system, which in Portsmouth is run by the Hospital Corporation of America, is one of the major economic players. Two of Portsmouth’s other notable employers include Liberty Mutual and Lonza Biologics, a Swiss chemical and biotech company. The tourist trade also generates many jobs in town, especially during the summer.


9. Ames, Iowa

Iowa State University is a major employer in Ames.

Downtown Ames, Iowa; Joe Wolf

There is a common theme among the 10 cities on this list — six of them are home to a major state university, which directly and indirectly creates thousands of jobs. For Ames, that college is Iowa State University, which had almost 30,000 students as of spring 2012, compared to Ames’ official U.S. Census population of almost 59,000. The city’s workforce is an interesting blend of state, federal and private employers. On the federal front, it’s home to the National Animal Disease Center, which studies ways to help livestock producers solve animal health and food safety issues. Other major employers include 3M, which has a manufacturing plant there, and Ball, which manufactures those ubiquitous canning jars. CNNMoney.com rated Ames at No. 9 on its annual Best Places to Live in the U.S. list for 2010.


8. Sioux Falls, South Dakota

Sioux Falls has attracted a number of financial companies in recent years.

Falls Park in Sioux Falls, South Dakota.

Founded in 1856 along the Sioux Falls on the Big Sioux River, this town in southeastern South Dakota has seen rapid growth in the past generation, almost doubling from 81,000 in 1980 to around 154,000 in 2010. Thanks to the fact that South Dakota has no corporate income tax, the city has been a magnet for jobs. Major employers in the area include Sanford Health, Avera Health, John Morrell & Co. (founded in 1827, the oldest continuously operating meat manufacturer in the U.S.), Wells Fargo and Citigroup. And the good news just keeps coming — Capital One opened a new customer service center in Sioux Falls in 2012, with plans to employ almost 800 workers by the end of the year. The booming economy has earned the city plenty of recognition in recent years. In Forbes‘ annual “Best Places For Businesses and Careers” list, Sioux Falls ranked No. 1 among small metro areas for nine straight years before “dropping” to No. 2 in 2011.


7. Midland, Texas

Midland, Texas, is a vital support for the West Texas oil industry.

Midland, Texas; Midland Development Corp.

The official motto in Midland, Texas, “The Sky’s The Limit,” makes perfect sense when your city boasts an unemployment rate of 3.8 percent. Since the discovery of massive oil reserves in the Permian Basin almost 100 years ago, West Texas oil fields have driven local economies, and several of Midland’s largest employers have oil connections. The area has also become a distribution and communications center for remote West Texas.


6. Grand Forks, North Dakota

Grand Forks is one of many cities in North Dakota with a hot economy.

Festival in Grand Forks, N.D.; Tuey

Relatively recent improvements in oil-drilling technologies have made it possible for oil companies to tap the massive Bakken Shale deposit in North Dakota. Many communities in the western part of the state have turned into the equivalent of modern-day gold rush towns, as unskilled workers earn an average of more than $100,000 per year, apartments are renting for $3,000 or more per month, and even fast-food outlets are paying $15 per hour to workers. By the way, several cities in the central and eastern portions of this notoriously frigid state have red-hot economies, as well. In Grand Forks, one of three North Dakota towns on this list, the largest employer is the University of North Dakota, but Grand Forks’ economy is extremely diversified, one reason the unemployment rate stands at 3.8 percent. Other major employers include Altru Health System, Grand Forks Air Force Base, and J.R. Simplot, which supplies the majority of potatoes for McDonald’s French fries. There are old-school companies such as North Dakota Mill and Elevator, the largest flourmill in the U.S., and high-tech employers such as LM Wind Power, the largest manufacturer of wind turbine blades in the world.


5. Iowa City, Iowa

The University of Iowa is a major economic driver in Iowa City.

University of Iowa campus; KM Satoh

The University of Iowa is the major player in town, employing more than 23,000, which includes thousands of full-time staffers at UI Hospitals and Clinics. Iowa City’s other major corporate citizens include ACT (the college testing service), Lear, Procter & Gamble and Oral B Laboratories/Gillette.


4. Burlington, Vermont

Several companies have corporate headquarters in Burlington, Vermont.

Burlington, Mt. Mansfield and Lake Champlain.

Burlington is widely regarded as one of the most beautiful towns in America, with its picturesque setting on Lake Champlain and historic architecture. The University of Vermont, founded in 1791, is a major employer, along with Fletcher Allen Health Care. Bruegger’s Bagels, Burton Snowboards and Dealer.com all have corporate headquarters in the Burlington-South Burlington metro area. With the scenic and historic beauty and good economy, it’s no surprise that A&E once ranked Burlington as No. 1 on its list of “Top 10 Cities to Have it All.”


3. Lincoln, Nebraska

Lincoln, Nebraska, has both the state capitol and state university.

Nebraska Cornhuskers football is a passion in Lincoln; Bobak Ha’Eri

There’s a good reason Lincoln has a 3.4 percent unemployment rate. Actually, there are two good reasons — this city in eastern Nebraska is blessed with both a state capitol and a major state university (the University of Nebraska). The city also has abundant jobs in the medical, financial, IT and insurance fields. The low unemployment rate isn’t the only good news in recent years for Lincoln: A 2008 Centers for Disease Control study found Lincoln to be the healthiest city in the United States.


2. Fargo, North Dakota

Fargo's big employer is North Dakota State University.

Downtown Fargo

Fargo’s North Dakota State University has undergone rapid expansion in recent years, growing from an enrollment of less than 10,000 students in the year 2000 to some 15,000 students by the end of the decade. It’s interesting to note that three of the cities on this list of boomtowns are in North Dakota, which happens to have the only state-owned bank in the country. The Bank of North Dakota helps attract companies via low interest rate loans, offers funding for new and existing businesses with high-risk profiles, and works to promote community development.


1. Bismarck, North Dakota

The state government is the biggest employer in Bismarck, N.D.

North Dakota state capitol building; Bobak Ha’Eri

North Dakota’s capitol city boasted a 2.5 percent unemployment rate in May 2012, the lowest for any metropolitan area in the U.S. State government is the biggest employer, providing jobs for more than 4,000 workers in the Bismarck-Mandan metro area. The area has been favorably mentioned in many national publications in recent years, earning recognition as the No. 2 Small Metro Area in Forbes’ annual ranking of “Best Places For Businesses and Careers,” and the No. 10 “Best Place to Live” in Outdoor Life magazine.



Here are the lowest unemployment rates for United States metropolitan areas in May 2012:

10. Portsmouth, N.H./Maine 4.1 percent
9. Ames, Iowa, 3.9
7. Midland, Texas, 3.8
7. Sioux Falls, S.D., 3.8
6. Grand Forks, N.D./Minn.
5. Iowa City, Iowa, 3.6
4. Burlington-South Burlington, Vt., 3.5
3. Lincoln, Neb., 3.4
2. Fargo, N.D./Minn., 3.0
1. Bismarck, N.D., 2.5


Here’s a link to the raw U.S. Department of Labor information so you can see how your city rates in unemployment.

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The author is a longtime professional journalist who has interviewed everyone from presidential contenders to hall of fame athletes to rock 'n' roll legends while covering politics, sports, and other topics for both local and national publications and websites. His latest passions are history, geography and travel. He's traveled extensively around the United States seeking out the hidden wonders of the country.