This study documents a substantial decline in employment volatility at business-cycle frequencies over the postwar period using state-industry level data. The distribution of total employment volatilities at the state level has become less disperse over time, and mean volatility has fallen. Similar results are obtained using employment data on one-digit sectors across states: all sectors have seen a decline in employment volatility over the postwar period, and state-sectors are more alike in terms of volatility levels. A key source of the decline in volatility appears to be widespread (across states and industries) decreases in the size of shocks hitting employment levels. Shifts in the demographic factors, and industrial structures of state economies have had little or no impact. Neither have inter-state employment shifts, such as migrations from the Frostbelt to the Sunbelt. The sources of the smaller employment shocks are unclear, although the evidence points to macroeconomic phenomena.