Alabama’s labor participation rate remains below national average

58 percent of Alabama’s eligible workforce is either employed or actively looking for employment, according to recent numbers from the Alabama Department of Labor.

The June Labor Market Information report showed an unchanged Labor Force Participation Rate for our state which still sits below the national average of 62.6 percent.

Other key numbers from the June report include:

• 3.2 state unemployment rate (seasonally adjusted)
• 4.1 national unemployment rate (seasonally adjusted)
• 72,699 unemployed in Alabama (+6,861 from May)

Keep reading to learn more from this month’s labor market report including which metro areas have the lowest unemployment rates.

Labor Force Participation Rate

The labor force participation rate (LFRP) represents the number of people in the labor force as a percentage of the civilian non-institutional population.

In other words, the participation rate is the percentage of the population that is either working or actively looking for work. The labor force participation rate is calculated as: (Labor Force ÷ Civilian Non-institutional Population) x 100.

Alabama’s total number in the Civilian Labor Force has grown every month since December 2024 but it still remains well below the national average. There are just four counties that are above the national average rate (62.6) including:

• Madison – 69.9%
• Shelby – 67.7%
• Limestone – 66.2%
• Chambers – 65.7%

39 of Alabama’s 67 counties sit above 50% participation rate.

Alabama’s unemployment rate

June marked the lowest seasonally adjusted unemployment rate for Alabama since August 2024. It remains just above June 2024 which was 2.9 percent.

Shelby County still has the lowest unemployment rate of Alabama’s 67 counties at 2.4 percent. Five others are tied for second at 2.5 percent including:

• Blount
• Elmore
• Limestone
• Morgan
• St. Clair

So how can the unemployment rate be down if the number of unemployed people grew by nearly 7,000? That’s where the “seasonally adjusted” term comes into play.

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 June report.

You’ll often see an impact on unemployment rates when schools are out during the summer. That’s likely why every Alabama metro has a higher unemployment rate than it did last month.

However, many of those metro areas have a lower unemployment rate than they did in June 2024.

• Birmingham: June 2025 – 2.8% | June 2024 – 3.0%
• Fairhope/Foley: June 2025 – 2.7% | June 2024 – 2.8%
• Huntsville: June 2025 – 2.6% | June 2024 – 2.7%
• Mobile: June 2025 – 3.7% | June 2024 – 3.9%
• Montgomery: June 2025 – 3.0% | June 2024 – 3.3%
• Tuscaloosa: June 2025 – 3.6% | June 2024 – 3.4%

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