Delaware’s Shrinking Labor Force Drives Unemployment Down to 4.6%
Delaware’s unemployment rate edged down again in September, marking the sixth straight monthly decline since April 2026. According to a report released by the Delaware Department of Labor, the state’s jobless rate is now 4.6%, slipping just a notch from 4.7% in August. But behind that improving headline percentage lies a quieter, more complex economic reality: the state’s workforce is shrinking.
When people stop looking for work, they vanish from the unemployment rolls altogether. That dynamic played out clearly between August and September, as Delaware’s total labor force fell from 505,300 to 504,800—a net drop of 500 people in a single month. The labor force figure captures active workers, those receiving unemployment benefits, and individuals actively searching for work without state assistance. When workers step away due to retirement, childcare challenges, or other personal reasons, they are no longer counted as unemployed, which mathematically pulls the overall rate down even when job creation slows.
Weighing the Job Losses Against Yearly Gains
The state lost 800 jobs between August and September, bringing seasonally adjusted nonfarm employment to 495,800 compared to 496,600 the previous month. Yet a longer lens offers a slightly different perspective. Employers across the First State have added a net 2,100 jobs since September 2025. That translates to less than 1% annual growth, or a modest 0.4% increase that narrowly outpaces the national growth rate of 0.3% over the same twelve-month stretch.
Job losses outweighed gains across most sectors as summer turned to autumn. Leisure and hospitality shed 600 jobs, while government lost 500 jobs, driven largely by a reduction of 400 positions in state government. Private education and health services as well as financial activities each saw a reduction of 200 jobs, while professional and business services dropped by 100. On the positive side, trade, transportation, and utilities managed to gain 500 jobs, and manufacturing added 300. Construction, information, and other services held entirely flat from August.
Regional Disparities Across Counties and Cities
Delaware continues to hold the highest unemployment rate among its regional neighbors, sitting at 40th in the nation alongside Illinois. Pennsylvania holds the 20th position alongside a 3.6% jobless rate, while Maryland ranks 26th with an unemployment rate of 3.9%. New Jersey is tied for 32nd with an unemployment rate of 4.2%. Nationally, South Dakota claims the lowest rate at 2%, while Washington, D.C., records the highest at 5.6%, with the national rate ticking up to 4.2% from 4.1%.
Within Delaware’s borders, economic conditions vary sharply by geography. The state’s three counties reported distinct jobless rates:
- Sussex County: 4.2%
- New Castle County: 4.6%
- Kent County: 5.0%
The state’s most populated cities faced higher pressure still. Both Wilmington and Dover recorded unemployment rates of 6.3% in September. Meanwhile, local area rates were mostly lower last month with a single major exception: Newark, where the unadjusted rate jumped from 5.9% to 6.3%.
