MONTGOMERY – Alabama’s unemployment rate dropped to 2.9% in August, but the state’s workforce participation rate dropped slightly, too.
Meanwhile, Morgan, Marshall, Madison, Limestone, and DeKalb counties – all at 2.2% – are among those with the lowest unemployment rate in the state, according to the state Department of Workforce.
Secretary of Workforce Greg Reed announced that average weekly wages increased in August to $1,117.54, its second highest level ever. This represents a yearly increase of $72.63 per week.
Additionally, the manufacturing sector and the leisure and hospitality sector saw record high wages in August. The manufacturing sector realized a yearly increase of $84.36 per week, and the leisure and hospitality sector realized a yearly increase of $45.74 per week.
“Wage growth is always something to celebrate and is a positive indicator of economic activity,” said Reed. “I’m optimistic that these wages will continue to increase. Increased wages help drive positive growth statewide, for both employers and employees.”
Alabama’s preliminary, seasonally adjusted August unemployment rate is 2.9%, down from July 2025’s rate of 3.0%. August’s rate is lower than August 2024’s rate of 3.1%. The rate represents 68,191 unemployed people, compared to 72,473 in July and 74,115 in August 2024.
The number of people counted as employed increased by 30,242 over the year to 2,310,036. The civilian labor force also increased over the year to 2,378,227, with 24,318 more people joining over the year.
Over the year, wage and salary employment increased by 15,400 to 2,205,700, with gains in the private education and health services sector (+5,900), the government sector (+4,000), and the manufacturing sector (+2,900), among others.
The labor force participation rate for August dropped slightly to 57.7%. The percentage of prime-age workers decreased by one-tenth of a percentage point to 78.3% over the month. Prime-age workers are those aged 25-54 years.
Counties with the lowest unemployment rates are Shelby, Elmore, and Blount counties at 2.1%, St. Clair, Morgan, Marshall, Madison, Limestone, DeKalb, and Autauga counties at 2.2%, and Cleburne and Baldwin Counties at 2.3%. Counties with the highest unemployment rates are: Perry County at 5.9%, Greene County at 5.7%, and Wilcox County at 5.6%.
Major cities with the lowest unemployment rates are Vestavia Hills at 1.8%, Pelham at 1.9%, and Madison, Hoover, Homewood, and Alabaster at 2.0%.
Major cities with the highest unemployment rates are: Prichard at 6.2%, Selma at 4.8%, and Bessemer, Anniston, and Mobile at 3.7%.
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