by Timothy McQuiston, Vermont Business Magazine Vermont weekly unemployment claims for the week ending September 20, 2025, to under 200 and to the lowest level of the year. New claims were 186 last week, down 31 claims from the week before and down 14 from last year at this time. Claims, which tend to be lowest in the summer, were 181 at the end of September 2024.
In Vermont for the weekly report, manufacturing accounted for 13% of the total, down 8 points from the previous week. Manufacturing overall has become a smaller part of the Vermont economy over the last 25 years and that trend appears to be continuing. The Service industry, which typically accounts for the most claims, last week reported 58% from the previous week, up 8 points. Construction was 8%, down 3 points.
For the week, Vermont total unemployment insurance claims were 1,970 (down 93 for the week and up 198 from this time last year).
The Vermont Unemployment Trust Fund is well capitalized. As of the most recent data, there was $326 million in the Trust Fund, down less than a million from the prior week (as claims are paid out on one side, employers are contributing to the fund on the other). The pre-pandemic Trust Fund balance on March 1, 2020, was $506.2 million.
In the week ending September 20, the US DOL reported that the advance figure for seasonally adjusted initial claims was 218,000, a decrease of 14,000 from the previous week's revised level and below estimates. The previous week's level was revised up by 1,000 from 231,000 to 232,000. The 4-week moving average was 237,500, a decrease of 2,750 from the previous week's revised average. The previous week's average was revised up by 250 from 240,000 to 240,250.
Meanwhile, the US August Labor Report from the US DOL indicated that employment is waning. This comes after a poor July report and another revised lowering of the June numbers. See National Employment Trends below.
Markets
Meanwhile, the stock market had a shaky week but rebounded on Friday after the weekly jobless claims report and the inflation report both moderated concerns of a weakening economy. It appears the Fed's concern over a rise in inflation is outweighed by a weakening economy, which led them to cut interest rates by 25 basis points September 17, 2025. The markets anticipate that the Fed will respond to the overall economic news by cutting rates twice more this year by another 25 basis points each. The inflation report from this week showed an increase of 2.9%, higher than the Fed's goal of 2%, but stable.
Powell hinted in a speech August 22 that overall economic conditions allow the Fed to "proceed carefully" with fiscal policy as downside risks mount.
The US unemployment rate for August was up one-tenth to 4.3%. The Vermont labor situation also weakened, despite the rate drop, but incomes have also stagnated.
The Fed raised rates starting in 2022 in order to stifle spiking inflation, but at a time when federal stimulus funds and a general economic recovery was also occurring. Now, they must decide on whether to risk more inflation by cutting rates at a time of a weakening economy, which could lead to stagflation. They appear to be siding on shoring up the economy and employment over inflation.
Wall Street has lobbied for a rate cut as it should stimulate economic activity and lower costs for businesses and consumers. It also makes stocks a more appealing investment vehicle if interest rates are low for other types of investments tied to high interest rates, like certificates of deposit (CDs) and money markets. As those rates fall, the "wall of cash" might come washing back to equities, or not.
Lower interest rates should also lower mortgage rates. These rates are not directly tied to the Fed rates and have come down more slowly than expected. There is also hope that if interest rates fall rents may also fall as overhead cost pressure declines on landlords and housing development and competition increases. Mortgage rates already have fallen.
The S&P, Dow and NASDAQ fell earlier in the week before rebounding, As of the close of trading Friday, the three major indices were down for the week. The S&P was at 6,643.70; the Dow was at 46,247.29 and the NASDAQ was at 22,484.068. All had reached historic peaks last week.
A looming government shutdown could result in federal worker layoffs, but the effect on the stock market is uncertain. While the markets have tended to "shrug off" shutdowns in the past, the current situation is more uncertain, according to analysts.
Meanwhile, the average 30-year fixed mortgage rate fell to 6.39%, after it peaked at 7.08% in May, as refinancing surged.
Unemployment rate drops one-tenth to 2.5%, Labor Force falls
The seasonally adjusted statewide unemployment rate for August was 2.5 percent. This reflects a decrease of one-tenth of one percentage point from the prior month’s revised estimate. Vermont has the second lowest rate in the nation, tied with North Dakota. South Dakota is lowest at 1.9% and California is highest at 5%.
The Labor Market, which is the denominator in these equations, fell by over 900, which offset a similar decline in the number of employed. Unemployment also fell, but by a slight amount. The civilian labor force participation rate was 64.6 percent in August, a decrease of one-tenth of one percentage point from the prior month’s revised estimate.
Public Assets Insitute reported today that not only has the labor situation weakened, despite the rate drop, but incomes have also stagnated.
“Over the past seven months, an estimated 5,000 Vermonters have left the labor force, in part due to retirements. While demographic shifts present real challenges, this is also an opportunity to continue connecting Vermonters with good jobs, training, and career pathways,” said Kendal Smith, Vermont Department of Labor Commissioner. “Vermont’s economy depends on a strong and engaged workforce—which means we all have a role to play in building it. There are many ways to retain talent and draw more people to Vermont, including housing solutions, education transformation, service opportunities, and everyday training and job support.”
The comparable United States rate in August was 4.3 percent, an increase of one-tenth of one percentage point from the revised July estimate. The seasonally adjusted Vermont data for August show the Vermont civilian labor force decreased by 910 from the prior month’s revised estimate (see Table 1). The number of employed persons decreased by 838 and the number of unemployed persons decreased by 72. No changes were statistically significant in the seasonally adjusted series.
The August unemployment rates for Vermont’s 14 counties ranged from 2.4 percent in Addison and Chittenden Counties to 3.6 percent in Essex County
National Employment Trends August 2025
- Nonfarm Payrolls: Increased by just 22,000 jobs in August, continuing a trend of minimal growth since April.
- Unemployment Rate: Rose slightly to 4.3% (its highest level since 2021), up from 4.2% in July.
- Long-Term Unemployment: Held steady at 1.9 million, now accounting for 25.7% of all unemployed individuals.
- Labor Force Participation: Remained unchanged at 62.3%, continuing a gradual decline over the past year.
- Employment-Population Ratio: Also unchanged at 59.6%.
Sector Highlights
Gains:
- Health Care: Added 31,000 jobs, below the 12-month average of 42,000.
- Growth seen in ambulatory services, nursing/residential care, and hospitals.
- Social Assistance: Up by 16,000 jobs, mainly in individual and family services.
Losses:
- Federal Government: Down 15,000 jobs in August; 97,000 lost since January.
- Mining, Quarrying, Oil & Gas: Declined by 6,000 jobs.
- Wholesale Trade: Dropped 12,000 jobs; down 32,000 since May.
- Manufacturing: Fell by 12,000 jobs, with transportation equipment hit hardest due to strike activity.
Wages and Hours
- Average Hourly Earnings: Rose by $0.10 to $36.53 (+3.7% year-over-year).
- Average Weekly Hours: Held steady at 34.2 hours.
- Manufacturing Overtime: Unchanged at 2.9 hours.
Revisions to Previous Months
- June: Revised down from +14,000 to -13,000.
- July: Revised up from +73,000 to +79,000.
- Net Effect: Employment for June and July combined is 21,000 lower than previously reported.
Demographic Breakdown
- Unemployment Rates by Group:
- Adult Men: 4.1%
- Adult Women: 3.8%
- Teenagers: 13.9%
- Whites: 3.7%
- Blacks: 7.5%
- Asians: 3.6%
- Hispanics: 5.3%
- New Entrants: Fell by 199,000 to 786,000.
- Discouraged Workers: Steady at 514,000.
Alternative Measures of Labor Underutilization
- U-6 (Broadest Measure): Rose to 8.1%, includes unemployed, marginally attached workers, and those working part-time for economic reasons.
Upcoming Releases
- September Employment Report: Scheduled for release on October 3, 2025.
- Preliminary Benchmark Revision: To be published September 9, 2025, aligning survey data with unemployment insurance records.
To support vital journalism, access our archives and get unique features like our award-winning profiles, Book of Lists & Business-to-Business Directory, subscribe HERE!
