Nebraska's unemployment rate might not be telling the whole story on job market

Nebraska’s unemployment rate has been sitting at 3%, well below the national average, for several months in a row.

But things aren’t as rosy as they seem.

As of September, more than 32,200 people were listed as unemployed. That’s up about 3,000 since the beginning of the year, and the state is on track to end the year with the highest number of unemployed people since the end of 2020.

Initial unemployment claims are up sharply over the past few weeks, something that’s not uncommon due to seasonality factors, but the increase is higher than it has been in several years. From the week of Thanksgiving through the week of Christmas, more than 8,200 people filed initial unemployment claims in Nebraska. That’s about 1,500 more than during the same period last year, and it’s the highest total for those five weeks since 2020, when the economy was in the throes of the COVID-19 pandemic.

The number of continuing claims, or people on unemployment for multiple weeks, has been on the rise as well, although it’s slightly lower than it was at this time last year.

Creighton University economics professor Ernie Goss said there are a number of factors affecting the job market, including inflation and increased tariffs.

Tariffs, particularly, are “hitting smaller businesses and medium-sized businesses more than larger businesses,” he said.

That’s because smaller businesses are hit harder by increases on imports from countries such as China and are less able to spread out the costs, Goss said.

Some sectors are also hit harder than others. For example, the December Mid-America Business Conditions Index, which Goss produces, found that Nebraska’s manufacturing exports for the first nine months of the year declined by about $700 million, or 12.6%, compared with the same period last year. That was more than double the rate of decline of the nine-state region covered in the report.

Goss said there’s somewhat of a disconnect between how the overall economy is doing and how the labor market is doing both nationally and in Nebraska.

The U.S. economy appears strong, with a stock market that’s near record highs, rising corporate profits and gross domestic product growth of 4.3% in the third quarter, the best reading in two years.

But the labor market does not look quite as good. The national unemployment rate has risen from 4% at the beginning of the year to 4.6% as of November. That’s the highest rate in more than four years.

“There's a huge divergence right now between the economy as measured by GDP, gross domestic product, and employment, measured by those who are employed, holding the job. And so that seems to be the case in Nebraska as well,” Goss said.

The November edition of Goss’ Mid-America Business Conditions Index showed that in September and October, the average weekly number of workers in Nebraska receiving unemployment compensation was 3% higher when compared with the same period in 2024. That was actually a lower increase than some other states in the region, however. South Dakota was 5.1% higher, Kansas was 10.2% higher and Missouri was 13.1% higher.

It’s not just unemployment figures that point to a weaker job market in the state. It’s also the amount of hiring companies are doing.

Despite Nebraska Department of Labor data that shows the state has hit records several months in a row for the number of people employed in the state, other data shows hiring is slowing down.

A September report from the Omaha branch of the Federal Reserve Bank of Kansas City showed that employment growth was slowing in most private industries in the state over the summer, with the exception of construction, health care, and leisure and hospitality.

The report also found that employers expect the labor market to continue to soften. Of the Nebraska firms surveyed, more employers reported that headcounts would be smaller by early 2026 than those reporting likely increases.

That lack of hiring is showing up most acutely for younger workers, especially those just out of high school or just out of college.

According to the report, the unemployment rate for those ages 19-22 in states covered by the Kansas City Fed is 9%. For those ages 23-24, it’s 6%.

“College graduates are having an especially tough time right now,” Goss said.

Another report in September from the Aksarben Foundation found that the state’s two largest cities are lagging their peers in job creation to the tune of nearly 70,000 jobs over the past five years.

“The lack of growth in jobs, workforce, and related wages has effectively stagnated the economy in terms of real economic growth,” Dana Bradford, CEO of C3 Brands and former chairman of the Omaha Chamber of Commerce, said at the time.

That report focused heavily on “brain drain,” or the loss of young, educated Nebraskans to better opportunities in other states, a trend that is likely exacerbated by the higher rate of unemployment for young people.

While hiring and job creation appear to be slowing in the state, the amount of layoffs appears to be increasing. Companies announced 14 mass layoffs in Nebraska in 2025, according to the state Department of Labor, which tied 2023 for the most since the pandemic. Nine of those involved at least 100 employees, the most in any year since 2020.

The biggest, of course, is the more than 3,200 people who will lose their jobs this month when the Tyson Foods plant closes in Lexington. That closure is expected to have a $3.3 billion annual economic impact on the state, according to a recent report from University of Nebraska-Lincoln’s Center for Agricultural Profitability.