Alabama unemployment drops below 3% for first time in over a year

For the first time since May 2024, Alabama’s non-seasonally adjusted unemployment rate has dipped below 3%.

According to the latest report from the Department of Labor, Alabama’s non-seasonally adjusted unemployment rate for July 2025 is 2.9%, down a tenth of a percent from June.

It’s the lowest non-seasonally adjusted rate since May 2024 when it sat at 2.4%.

Other key non-seasonally adjusted numbers from the report include:

• AL Labor Force Participation Rate: 57.8%
• U.S. Unemployment Rate: 4.6%
• U.S. Labor Force Participation Rate: 62.7%

Seasonal adjustment

The Department of Labor describes the seasonal adjustment as a “statistical technique that eliminates the influences of weather, holidays, the opening and closing of schools, and other recurring seasonal events from economic time series. This permits easier observation and analysis of cyclical, trend, and other nonseasonal movements in the data.”

Here’s how that adjustment affected some of the numbers from the July report.

Alabama’s metro areas

All 12 of the metropolitan areas used in the ADOL’s report have a lower unemployment rate than July 2024.

Here’s where each city stood at the end of July 2025:

• Anniston/Oxford: 3.3%
• Auburn/Opelika: 3.1%
• Birmingham: 2.7%
• Daphne/Fairhope/Foley: 2.4%
• Decatur: 2.4%
• Dothan: 2.8%
• Florence/Muscle Shoals: 3.3%
• Gadsden: 3.0%
• Huntsville: 2.4%
• Mobile: 3.4%
• Montgomery: 2.9%
• Tuscaloosa: 3.6%

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