Idaho’s unemployment rate held at 3.6% in August, but the steady headline masked another contraction in the state’s labor force. The number of people working or seeking work fell by 486 from July to 998,378, while labor-force participation slipped one-tenth of a percentage point to 61.5%, according to the Idaho Department of Labor’s release.
Total employment declined by 410 to 962,214, while the number of unemployed Idahoans fell by 76 to 36,164. Compared with August 2025, the labor force was smaller by 9,649 people, or 1%, and employment was down by 9,296. Because the unemployment rate measures the share of the labor force without work—not the share of all adults who are working—a falling labor force can keep the rate steady even when employment also declines.
Payrolls moved in the other direction
A separate survey of employers showed Idaho adding 2,800 nonfarm payroll jobs in August, a 0.3% monthly increase that brought the total to 890,700. Accommodation and food services posted the largest percentage gain at 2.4%, followed by other services at 1.6%, arts, entertainment and recreation at 1.4%, and durable-goods manufacturing at 1.3%. Private educational services, natural resources and transportation, warehousing and utilities were among the sectors that lost jobs. Over the year, payroll employment rose by 7,800, or 0.9%, even as several government and service sectors contracted.
The two measures can move differently because they answer different questions. The household-based labor-force series counts employed people where they live, while the establishment survey counts jobs where employers operate. The U.S. Bureau of Labor Statistics explains that distinction in its August summary, which reported a national unemployment rate of 4.1% and essentially unchanged payroll employment in most states.
Participation falls below the national rate
Idaho’s monthly report marked August as the first time the state’s labor-force participation rate, 61.5%, fell below the national rate, 61.6%. The state’s participation rate was down 1.7 percentage points from a year earlier, a larger decline than the nation’s 0.7-point drop. Idaho’s employment-to-population ratio remained slightly higher than the national figure, 59.3% versus 59.1%.
The statewide figures also conceal substantial local variation. Adams County had the highest August unemployment rate at 6.7%, followed by Clearwater County at 6.5%, while Teton County was lowest at 2.5%. Among metropolitan areas, Idaho Falls recorded the largest monthly payroll gain at 0.8%; Coeur d’Alene declined 0.3%, and Lewiston and Pocatello were unchanged.
Idaho’s data page notes that these estimates inform decisions such as workforce-funding allocations and possible extensions of unemployment benefits. For businesses and policymakers, August’s mixed signals therefore matter beyond the unchanged 3.6% rate: employers added jobs on net, yet the pool of residents participating in the labor market continued to narrow. September figures are scheduled for release October 16.
