Unemployment Woes Spreading Across Urban and Rural America. What It Could Mean for 2026 Elections
When Donald Trump recaptured the presidency in 2024, the No. 1 issue for most voters was the economy. As 2026 moves along, that issue area appears to be a growing problem for the White House in the forms of inflation, low consumer confidence, and now jobs.
The latest county-level data from the Bureau of Labor Statistics shows the unemployment rate has risen across the country in the last year and in 12 of the American Communities Project’s 15 community types.
The ACP compared data from January 2026 and January 2025 and found unemployment had risen by about 0.3 percent — including in communities full of better-educated workers who tend to be better positioned to ride out tough times.
Perhaps just as noteworthy, the ACP analysis found that the labor force (those actively seeking work or employed) had dropped nationally and in nine of the 15 community types in the same period. A declining labor force figure is sometimes the sign of discouraged workers and generally not a sign of a healthy economy.
The spread of lukewarm-to-poor job news across the ACP types, with worse news in unexpected communities, suggests potential trouble in the 2026 midterms for the White House and the GOP.
Parsing Unemployment
There are a few ways of viewing the January county unemployment data.
On one hand, the national rate is still only 4.7%. That’s not awful. In fact, historically speaking, 4.7% is pretty good for county-level data, which are not seasonally adjusted, and lower than the figure was for most of Barack Obama’s time as president.
However, like most economic metrics, unemployment is a somewhat relative measure. When you are used to low unemployment, 4.7% can feel high. And 4.7% is the highest the figure has been since September 2021.
Add in the fact that the stock market is soaring and people elected the president to “fix” the economy, and you have a political challenge. That’s a lot of dissonance for voters.
In addition, the numbers look quite different at the community-type level, depending on where you are. They range from a low of 3.8% in the Aging Farmlands to a high of 6.6% in the Hispanic Centers. But the increases in specific community types also tell a story.
For instance, the 4.5% unemployment rate in the Urban Suburbs is below the national average, but only by 0.2 points. And the increase of 0.5 points since last January is higher than the national increase. The educated, high-earning Urban Suburbs are generally better positioned to handle economic stagnation or dips, but that doesn’t appear to be the case in 2026.
It’s possible that we are starting to see the beginning impacts of the adoption of artificial intelligence in those communities, as AI starts to take away lower skill “knowledge economy” jobs.
The bigger unemployment jumps in Graying America and the LDS Enclaves (0.7 points each), and the Native American Lands (0.8 points) also bear watching.
Graying America’s numbers may have something to do with dips in tourism over the last year, but the numbers in the LDS Enclaves and Native American Lands are harder to understand, other than the fact that rural communities often feel the impacts of a slowdown first. But the larger story is how unemployment is up almost everywhere.
Republicans may take some solace in the better unemployment figures in the Evangelical Hubs, Middle Suburbs, and Rural Middle America. Those three community types have seen small improvements in their unemployment rates, and they went heavily for Trump in 2024. Such improvements might make voters in those places a little more enthusiastic about turning out in November. But those relatively good unemployment figures come with a big caveat around their labor force numbers.
Looking at the Labor Force
Of the 15 community types in the ACP, only six saw an increase in their labor force this January compared with January 2025. It was an interesting mix of places: the African American South, Big Cities, and College Towns, which all tend to vote Democratic, and the Exurbs, Native American Lands, and Working Class Country, which lean Republican.
The news in those places was not uniformly positive. Look at the chart above, and you will see that the unemployment rate was up in all of them. But the fact that workers were wading into the labor pool could be viewed as a positive sign.
That wasn’t the case in most community types.
Again, it’s worth noting that the Urban Suburbs not only saw an increase in their unemployment rate but also watched their labor force number decline. That could mean trouble, and unhappy voters, in places that usually are more immune to economic slowdowns. The Urban Suburbs are reliably Democratic in their vote, and a lackluster economy could drive voters to turn out in those places.
But the bigger story is the many kinds of places where the labor force numbers are down, from the densely populated, wealthy Urban Suburbs to the quieter, pastoral communities of Graying America and Rural Middle America.
And those three Trump-voting communities that saw declines in their unemployment rate — the Evangelical Hubs, Middle Suburbs, and Rural Middle America — all saw decreases in their workforce numbers. In fact, those three communities had fewer people employed in January 2026 than they did in January 2025 — all together about 200,000 fewer people.
Sometimes unemployment rates can be deceptive. As we noted on this site recently, the Middle Suburbs and Rural Middle America both rely heavily on manufacturing jobs, which are down since last year.
It’s Still Early
Of course, as with any new set of data, these numbers represent only a moment in time. November is still months away, and conditions could improve. But there are reasons to be skeptical of a quick turnaround.
The war in Iran is likely going to leave a big wake in the economy even if it is resolved soon. Manufacturing jobs have been declining for decades. Inflation has not yet been tamed. And the concerns around AI are not likely to abate anytime soon.
(Just last week, billionaire Elon Musk went on his social media platform to call for “universal HIGH INCOME” checks from the federal government to stem any AI job loss concerns.)
Throw in the point that voter notions about the economy often get baked into the electorate months before Election Day, and it’s hard to see the economy as anything but a burden to the party in power in 2026.
The story of the January 2026 unemployment numbers in the ACP shows a lot of pain out there across the board, even in places we don’t usually see it. To be clear, these are not horrifying numbers, but they aren’t good and their broad-based nature suggests an economy that is on a strange path, unsettled and unsettling for many kinds of voters.