Alabama's unemployment rate climbed to 3.5% in September, up from 3.4% in August and well above the 2.8% recorded a year earlier, even as the state added thousands of jobs over the past year. The preliminary, seasonally adjusted figure means 82,075 Alabamians were counted as unemployed last month, compared to 80,550 in August and 65,692 in September 2025.
Jobs Grew, But So Did the Jobless Count
The seemingly contradictory numbers come from the Alabama Department of Workforce, which reported that wage and salary employment rose over the year, though its own releases differ on the exact figure — one snippet puts the increase at 24,300 jobs to a total of 2,218,800, while another cites a gain of 22,100 to 2,216,200. As first reported by AL.com, the state's employed population actually fell by 2,080 over the month to about 2.3 million, while the civilian labor force shrank by roughly 560 people during the same period.
Alabama Workforce Secretary Greg Reed attributed the rising rate to fewer people participating in the labor force rather than to widespread job losses, according to the department. Reed said nearly 80% of prime-age workers — those between 25 and 54 — currently have jobs, noting that labor force participation in that age group rose from 78.4% in September 2025 to 79.5% in September 2026.
Who's Being Left Out of the Count
Reed said many of the people excluded from the broader labor-force count are older adults, pointing to Alabama's larger retiree population as a factor. Alabamians age 55 or older who are excluded from the labor force participation rate made up 61.7% of that group, per the department's figures. That dynamic plays out nationally too — the AARP Public Policy Institute reported that the U.S. labor-force participation rate for workers 55 and older actually slipped from 37.2% to 36.9% in September, even as the overall national participation rate ticked up from 61.6% to 61.8%.
Nationally, the picture mirrors Alabama's mixed signals. The same AARP report found the overall U.S. unemployment rate rose slightly from 4.1% to 4.2% in September, while the economy added just 29,000 jobs that month, a sharp slowdown from the 133,000 jobs added in August after revision.
Where the New Jobs Landed
Alabama's year-over-year job gains were concentrated in a handful of sectors. The leisure and hospitality industry added 10,200 workers, private education and health services grew by 7,300 to a record 272,000 employees, and professional and business services gained 6,800 workers.
Those statewide gains track with broader regional trends. The U.S. Bureau of Labor Statistics found that employment rose in five of Alabama's seven largest counties between March 2025 and March 2026. The bureau also reported that Alabama's U-4 labor-underutilization measure, which accounts for discouraged workers alongside the unemployed, stood at 3.0% — well below the 4.6% national rate.
A Patchwork of Local Rates
County-level unemployment rates varied widely across the state in September. Shelby, Limestone, and Chambers counties each posted rates of 3%, while Morgan and Elmore counties sat at 3.1%, and Madison and Blount counties each came in at 3.2%. On the higher end, Perry County's rate reached 6.6%, Greene County stood at 6.5%, and Monroe County was at 6.4%.
City-level figures showed a similar spread. Pelham posted the lowest rate among cities at 2.6%, followed by Vestavia Hills at 2.8% and both Trussville and Alabaster at 2.9%. At the other end, Prichard's unemployment rate reached 7%, Selma stood at 5.8%, and Tuscaloosa came in at 5%.
