Abstract
This paper measures how full-employment rates of unemployment vary across states and what a national measure misses about local labor-market conditions. Using state unemployment and vacancy rates, I construct monthly state-level u* for all 50 states from 2001 through 2025. Each measure is the unemployment rate at which the marginal social costs of joblessness and recruiting balance within a state, conditional on the observed allocation of workers across states. I show that long-run state means differ by more than two percentage points, dispersion rises after major downturns, and rankings are generally persistent but not fixed. From 2001–2007 to 2021–2025, the cross-state average rises by 0.89 percentage points even as average unemployment falls, with higher recorded vacancies more than offsetting the decline. National u* closely tracks the center of the state distribution, but evaluating each state’s unemployment against the national rather than its own u* changes whether the state is classified as slack, near full employment, or tight in 15.5 percent of state-months. In about 18 percent of months, neither slack nor tight conditions encompass two-thirds of states, showing that the geographic breadth of labor-market conditions can differ from the share of workers exposed to them.
Data
If you use these data, please cite the paper.
Monthly state-level full-employment unemployment rates for all 50 states and the District of Columbia, January 2001–December 2025 (15,249 state-month observations). October 2025 is not included in this release.
The file contains the month (date, formatted as YYYY-MM-DD), state FIPS code (state_fips), postal abbreviation (state_abbr), state name (state_name), and u* in percent (u_star_pct; for example, 3.86 means 3.86%).
Citation
Pusateri, Nicholas R. 2026. “Unveiling u*: A State-level Approach” Working Paper. URL: https://nicpusateri.com/unveiling.
@article{pusateri2026unveiling,
title={Unveiling $u^\ast$: A State-level Approach},
author={Pusateri, Nicholas R.},
journal={Working Paper},
year={2026},
url={https://nicpusateri.com/unveiling},
}