U.S. Map of Unemployment Trend

This shows the unemployment trend from March, 2007 (the low in national unemployment) to September, 2007.

Pure red indicates unemployment increased by 1%.
Pure yellow represents no change.
Pure green indicates unemployment dropped by 1%.

First, the good news. Arizona's unemployment dropped from 3.9% to 3.3%. Idaho and Mississippi are also showing good trends. Any state in the yellow to green part of the color spectrum is doing okay (at least as far as the trend goes). Unemployment is holding steady in Texas (and Texas has a large population). Hawaii is doing well, which might help support its lofty real estate market.

Now the bad news. Roughly 1/8th of the population lives in California, which saw its unemployment increase from 4.8% to 5.6%. This doesn't bode well for its housing market. Any state in the orange to red part of the color spectrum isn't doing all that well lately (at least as far as the trend goes). Michigan saw its unemployment rise the most, from 6.5% to 7.5%.

Source Data:
BLS: Local Area Unemployment Statistics