A forum for information and analysis on the Arkansas economy

Metro and County Employment & Unemployment – December 2020

The BLS report on employment and unemployment in counties and metropolitan areas for December was released this morning.  For Arkansas, the data showed that the changes reported in the remarkable state-wide report for December were widely reflected in local statistics across the state.

To review: When the state-level employment report was released two weeks ago, the most notable (incredible?) news was the decline in the unemployment rate from 6.3% to 4.2%.  Underlying the drop was a surge in the number of employed (up 5.6% from the previous month) and a sharp reduction in the number of unemployed (down 31.8% from November).  Taken at face value, this drop suggests that nearly one in three of those unemployed in November found employment in December (at least statistically speaking—gross labor market flows are more complex).  These figures are gleaned from the BLS’s Household Survey (a.k.a., the Current Population Survey), which is always subject to a wide range of uncertainty and which has been plagued by and problems during the pandemic.  Meanwhile, the nonfarm payroll statistics, generated from the Establishment Survey (officially known as the Current Economic Statistics survey), showed a significant  increase in total statewide employment in December—but nowhere near the magnitude of the increase reported in the Household Survey.

Metro Payroll Employment
Beginning with the metropolitan area report on nonfarm payroll employment:  The December report showed total employment up in five metros, down in two, and unchanged in Hot Springs.  In percentage terms, gains in Fayetteville, Little Rock, Memphis and Texarkana were greater than or equal to the statewide rate of increase.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Compared a December 2019, most metro areas showed employment declines in December 2020.  The exception was Jonesboro, which showed a 1.3% gain for the year.  Hot Springs has shown a remarkable rebound after experiencing the sharpest decline of any Arkansas metro area during March and April.  Compared to a year earlier, Hot Springs employment is down only 0.8%.  Among the other metros showing year-over-year declines, Fort Smith, Little Rock, Memphis and Pine Bluff registered larger percentage declines than the statewide average of -2.8%.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Metro Unemployment
On the Household Survey side of the report, sharp declines were registered for each metro area except Memphis. Unemployment rates in Fayetteville and Jonesboro dropped below 4% and Little Rock’s rate declined to 4.5%.

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

The largest decline in unemployment among metro areas was in Pine Bluff (-2.8 percentage points) and the smallest decline (excluding Memphis) was in Texarkana (-1.8 percentage points).  Compared to December 2019, unemployment rates are higher in all Metro areas, with the net changes ranging from +0.6 percentage points in Pine Bluff to up 3.5 percentage points in Memphis.

Source: Bureau of Labor Statistics, Smoothed Seasonally-Adjusted Metropolitan Area Estimates

Comparing the numbers from the Household Survey (HH) and the Payroll Survey (NFPE), the first two columns of the table below compare percentage changes for employment from November to December, with obvious differences between the two. Memphis is a particular outlier for both measures,

The third column of the table shows the percentage changes in the number of unemployed from November to December.  The extreme drops in the number of unemployed are shared across most metro areas, with the exception of Memphis and Texarkana.

Source: Bureau of Labor Statistics and author’s calculations

The common patterns for most metropolitan areas within Arkansas—and the differences displayed by those with significant geographical regions outside of the state of Arkansas—leads one to suspect that the process of allocating estimated statewide changes to local areas might be important for interpreting the metro (and county) data.

County Unemployment Rates
There are no payroll employment statistics available on the county level, but the county statistics on unemployment broadly mirror the statewide data.  Each of Arkansas’ 75 counties registered unemployment rate declines, with changes ranging from -2.8 percentage points in Chicot and Mississippi Counties to -1.0 percentage points in Newton, Scott, and Yell Counties.  There is a notable negative relationship between the November-December changes in unemployment rates and the level of unemployment in November, with a correlation of -88%.  That is, counties with relatively high unemployment rates registered relatively large declines.

With the November-December declines taken into account, differences in unemployment rates around the state have therefore narrowed.  As illustrated in the interactive map below, nearly half of Arkansas’ counties registered unemployment rates below 4.0%, with the lowest in the state being Madison County at 2.8%.  At the upper end of the range, Chicot County retained the dubious distinction of having the highest unemployment rate in the state, but as noted above, a drop of 2.8 percentage points lowered the Chicot County’s unemployment rate to 8.4%.

In terms of the changes in the numbers of employed and unemployed, the county-level data closely correspond to the statewide totals.  The number of unemployed declined in all 75 counties, with changes ranging from -14.8% in Columbia County to -32.7% in Crittenden County.  The median change among the counties was -27.8%.  Similarly, increases in the number of employed were in a relatively tight range:  From +5.1% in Crittenden County to +2.8% in Montgomery County.  The median was +4.1%.

Overall, the statistics for Arkansas’ metro areas conform to the statewide totals released two weeks ago.  Given the current situation, measurement of key economic indicators is subject to wider-than-usual ranges of uncertainty.  That seems to be particularly true for the data associated with the Household Survey.  While the magnitudes of changes in employment and unemployment near the end of 2020 are subject to likely revisions, the overall takeaway from the December employment reports—state, metro, and county—is that labor market conditions improved in Arkansas toward the end of the year, albeit perhaps not as significantly as these initial statistics suggest.

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Arkansas Employment and Unemployment – December 2020

The state employment report for December, released this morning, suggest a very robust labor market improvement in Arkansas (to say the least!).  The headline, a 2.1% decline in the unemployment rate to 4.2%, is an unprecedented change.  While that particular statistic probably overstates the degree of the improvement, the details of the report suggest improvement nonetheless.

Source: Bureau of Labor Statistics

The sharp decline in the unemployment rate was both unexpected and surprising in its magnitude.  The national unemployment rate was previously reported as being unchanged at 6.7% for the month.  As indicated in the figure below, one-month changes in unemployment rates varied considerably among the states, with changes ranging from +2.0% in Colorado to -2.7% in New Jersey.  Arkansas’ change was the second-largest decline.  The median change was -0.1%.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

The December drop in Arkansas unemployment is also surprising in the context of recent data on weekly unemployment insurance claims.  After dropping sharply over the summer months, the number of initial and continued claims for unemployment insurance in Arkansas had leveled off in November and December.

Source: Department of Labor

This suggests that today’s reported drop in the number unemployed was driven primarily by the underlying household survey results.  The decline was the largest on record, with unemployment falling by 26,639 from 83,863 to 48,186.  Meanwhile the survey respondents reported far better employment prospects:  The number of employed was reported to have increased by 65,543, another unprecedented change.  With the number of employed surging, the labor force evidently increased by 38,904.  The recent volatility of the labor force (the sum of employed and unemployed) is an indication of the uncertainty behind the unemployment estimates during 2020.  The Bureau of Labor Statistics has reported that the household survey has been plagued by misclassifications during the pandemic, and there is no clear economic explanation of such volatility in labor force participation, other than shifting definitions and classifications during turbulent times. The magnitudes of changes in the employed and unemployed figures in the December report suggests that measurement uncertainty is a factor that should be considered in interpreting the reported unemployment rate.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

The unemployment statistics are scheduled to undergo their annual revisions over the next few weeks. These revisions typically smooth out some of the extreme month-to-month changes in the series.  However, during the pandemic, the BLS has adopted modified procedures for identifying outliers and applying seasonal factors.  It is not clear how the revisions might effect the preliminary estimates this year.

Payroll Employment
Although not as provocative as the drop in the unemployment rate, December’s report on nonfarm payroll employment does seem to corroborate an encouraging view of Arkansas labor market conditions.  The payroll data showed an increase of 4,300 jobs, or 0.35% (seasonally adjusted).  Compared to December 2019, employment was down 35,500, 2.8%.  The U.S. aggregate had previously been reported to have declined slightly for the month.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

The December employment gains were particularly prominent in Retail Trade and in Professional and Business Services.  A more detailed breakdown shows that the increase in Professional & Business Services was primarily due to a surge in Administrative & Support Services.  Notable gains were also reported for Transportation & Utilities and Education & Health Services (primarily Health).  Employment in Leisure & Hospitality services suffered a setback in December, declining by 1,100 jobs after a remarkable recovery in the months from April through November.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Compared to the pre-COVID employment peak in February 2020, December’s employment levels showed a total decline of 35,300 jobs, with the bulk of those job-losses concentrated in Service-providing sectors and Manufacturing.  On the other hand, several sectors show net increases over the February-December period, with Professional & Business Services now added to the list of positive-growth sectors.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

 

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Metro Area Employment and Unemployment – November 2020

The latest employment report for metropolitan areas showed that nonfarm payroll employment expanded in most of Arkansas’ metropolitan area.  The exceptions were Memphis and Little Rock, which were both essentially unchanged.  Employment in Hot Springs, Jonesboro and Pine Bluff increased by 1.0% compared to the previous month, while Fayetteville, Fort Smith and Texarkana saw somewhat smaller increases.

Source: Bureau of Labor Statistics

Since the employment trough of April 2020, Hot Springs has shown the strongest bounce-back:  Up 17.0% in seven months.  Hot Springs had previously experienced the largest percentage decline in employment over the February-April contraction.  The smallest percentage recovery has been in Pine Bluff, which experienced a relatively small downturn early in the year but has seen sluggish recovery in the period since April.  Relative to pre-pandemic employment levels, Jonesboro had recovered by September and continues to tally net gains for the year.  The other metro areas in Arkansas remain below levels of February 2020, with net losses ranging from -0.8% in Texarkana to -4.5% in Little Rock.

Source: Bureau of Labor Statistics

Unemployment rates in Arkansas’ metro areas were generally little changed from the previous month.  In Fayetteville and Pine Bluff, unemployment rates were unchanged.  In Fort Smith, Hot Springs, Jonesboro, and Little Rock, unemployment rates declined by 0.1%.  Larger changes were registered for Memphis and Texarkana: The unemployment rate in Memphis declined three full percentage points, from 9.9% to 6.9%.  In Texarkana the unemployment rate increased by 0.9 percentage points, from 6.2% to 7.1%.

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

At the county level, unemployment rates were unchanged or higher in 66 counties in November, with unemployment rate declines in only nine counties.  The largest decline was in Pulaski County, down 0.3 percentage points from 7.7% to 7.4%.  As indicated in the interactive map below, counties with higher unemployment rates tend to be clustered in the eastern and southern portions of the state, with lower rates more prevalent in west and central Arkansas.  Larger metropolitan areas also continue to show somewhat higher unemployment rates than the more rural areas.  Madison County continues to register the lowest unemployment rate in the state at 3.9%, while Chicot County has the highest rate: 10.9%.

 

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Arkansas GDP During the Pandemic

State-level GDP data for the third quarter were released over the holidays (December 23).  The latest data showed that Arkansas Real GDP increased 7.1% in Q3 (an annual rate of 31.8%).  The nationwide growth rate was 7.5% (annual rate 33.4%).  The change in real GDP was positive for all 50 states plus the District of Columbia, with annual growth rates ranging from 52.2% in Nevada to 19.2% in D.C. It was generally the case that states that had experienced the largest downturns in the first half of the year rebounded to have higher growth rates in the third quarter.

As illustrated in the figure below, U.S. GDP declined by 10.1% between 2019:Q4 and 2020:Q2, while Arkansas GDP declined by 8.8%.  After the third quarter increases, U.S. GDP remained 3.4% lower than its level at the end of 2019.  Arkansas GDP was down only 2.3%.

Source: Bureau of Economic Analysis

The table below decomposes the changes during 2020 by major industry sector for Arkansas and the U.S.  In many of the most pandemic-sensitive sectors (e.g. Accommodation and Food Services) the declines over the first half of 2020 were smaller in Arkansas than the U.S. average.  For most sectors, the third-quarter recovery brings Arkansas closer to pre-pandemic production levels.  In some sectors, Arkansas GDP growth has moved into positive territory, with total Q3 output above levels of 2019:Q4.

Source: Bureau of Economic Analysis

Although the third-quarter GDP increases represent significant recovery from the economic downturn in the first half of 2020, it is likely that many service-related sectors will remain remain below total capacity for some time as efforts to control the COVID-19 pandemic continue.

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Arkansas Employment and Unemployment – November 2020

The pace of recovery in Arkansas labor markets showed clear signs of slowing in November, following similar patterns as the national data released two weeks ago.  Today’s news release from the Bureau of Labor Statistics reported that Arkansas’ unemployment rate was unchanged from October, remaining at 6.2%.  The national unemployment rate declined only 0.2% for the month, falling from 6.9% to 6.7%.

Source: Bureau of Labor Statistics

The underlying components of the unemployment rate showed small changes from October to November:  The number of employed was reported down 2,746 and the number of unemployed declined by 179–essentially unchanged.   The labor force, the sum of employed and unemployed, declined by 2,925.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Volatility in the labor force data reflects the difficulty of measuring rapidly changing employment conditions that have prevailed in 2020.  From the early stages of the pandemic through the summer recovery months, labor flows were particularly fluid, with the data suggesting that people were moving between employment and unemployment, as well as in and out of the labor force, at an unprecedented pace. As that pace has slowed, the data are suggesting that labor force participation is down by about 35,000 from a year earlier.  In terms of labor force participation rates, Arkansas has fallen to 56.3%, down 1.9 percentage points from February.  Over the same period, the net change in the U.S. participation rate has also been -1.9 percentage points.

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm payroll employment increased by 4,500 in November (seasonally adjusted).  Job growth continues, but at a slower pace than during the initial stages of economic rebound.  After seven months of recovery from the April 2020 employment trough, Arkansas payroll employment remains 3.2% below its pre-pandemic level in February.  Nationwide, the net change from February through November was 6.5%.  As of November, U.S. employment has now recovered over half of the jobs lost from February through April, while the recovery in Arkansas has amounted to nearly two-thirds of the initial job-losses.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Breaking down the employment data by sector, we see that ongoing employment declines are concentrated in sectors directly affected by economic shut-downs and social-distancing limitations,  Education and Health Services, Leisure and Hospitality Services and Other Services account for the bulk of net job losses during 2020.  Government employment is also down, primarily associated with lower employment by public schools, colleges and universities.  Manufacturing employment has also been slow to recover but showed a relatively strong increase in November.  The list of sectors in which employment has fully recovered to pre-February levels include Construction, Wholesale and Retail Trade, Transportation & Utilities, and Professional & Business Services.

The concentration of ongoing job losses in the service sectors suggests a simple explanation for the recent slow-down in employment recovery both in Arkansas and nationwide:  Many service-related businesses continue to operate well below capacity, due to both formal and informal restrictions to encourage social distancing. As long as those sectors are operating under such constraints, the extent of full recovery is limited.  Businesses have been extraordinarily innovative during the pandemic, but there so far we can proceed to getting the economy back to “normal” until we are able to put the COVID-19 pandemic, and efforts to control it, behind us.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

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Arkansas Personal Income – 2020:Q3

New data from the Bureau of Economic Analysis released today shows that Arkansas personal income declined by 5.5% in the third quarter — corresponding to a -20.3% annual rate.  Nationwide, personal income was down 2.6% (a 10.0% annual rate).  The BEA reported that income was lower in all 50 states, with annualized percent declines ranging from -0.6% in Georgia to -29.9% in West Virginia.

The third quarter declines were driven primarily by decreases in personal current transfer receipts as the impact of CARES Act relief payments declined from their second-quarter surge.  Revised data showed that transfer receipts in Arkansas rose 57.0% in the second quarter and declined by 24.6% in the third.  The national averages showed a second-quarter increase of 75.4% and a third-quarter decline of 23.0%.

After the second-quarter increases and third quarter declines, Arkansas personal income was up 4.1% relative to Q1, with the corresponding U.S. total up 5.1%.

Source: Bureau of Economic Analysis

Net of transfer payments, Arkansas personal income categories generally showed encouraging increases in the third quarter. All major components of earnings increased in Q3, with Proprietors’ Income rebounding sharply from its decline in the second quarter.  Dividends, Interest, and Rent was down slightly.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

In addition to the increases in third-quarter earnings, today’s report contained some relatively large revisions to data from the second quarter.  Most encouraging, wage and salary disbursements were revised 4.0% higher than originally reported.  The surge in transfer receipts in the second quarter was also revised higher for Arkansas.

Source: Bureau of Economic Analysis

Net of transfers, the third quarter data show significant recovery from the sharp declines in the second-quarter. Compared to the first quarter of the year, Arkansas Personal Income Less Transfer Payments was down by only 0.3% in Q3.  Nationwide, Income less transfers was down 1.0%.

Source: Bureau of Economic Analysis

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Metro and County Employment and Unemployment – October 2020

The latest data on local area employment and unemployment show that most regions of the state continue to recover from the economic downturn we experienced in March and April.  October unemployment rates were down in all of Arkansas’ metro areas (except Memphis) and were down in all 75 counties.  Payroll employment expanded in five of eight metro areas in October—in some cases significantly.  Regional differences remain, however, as both the severity of the downturn and the strength of recovery differ among local economies.

As shown in the table below, payroll employment expanded by over a full percentage point in Northwest Arkansas, Hot Springs, and Memphis. Employment also increased in Fort Smith and Jonesboro.  Little Rock was unchanged, while Pine Bluff and Texarkana were down compared to the previous month.  Nevertheless, since the employment trough of April 2020, all eight metro areas have seen employment gains, ranging from 2% in Pine Bluff to nearly 16% in Hot Springs.  In part, these differing rates of recovery reflect the magnitude of the initial downturn:  Hot Springs saw the largest job losses in the state from February to April, while Pine Bluff experienced the smallest percentage decline.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Compared to the cyclical peak month of February 2020, Jonesboro has recovered to the point of having a net gain in employment, while net declines remain in the other metro areas.  Little Rock, Memphis, and Pine Bluff continue to show net job losses of 4% or greater, with the others down between one and three percent.

Unemployment rates were down in seven of eight metro areas, the exception being Memphis, where the rate increased from 9.3% to 9.9%. In a month when the state and national unemployment rates declined by one full percentage point, we saw declines of one percent or more in Hot Springs, Jonesboro, Little Rock and Pine Bluff.  Texarkana and Fayetteville were down 0.9 percentage points.  The change in Fort Smith was smaller, but still indicated improvement.

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Estimates

At the county level, unemployment rates declined all 75 of Arkansas’ counties  in October.  Because the county data are not seasonally adjusted, a portion of these gains can be attributed to seasonal factors.  Nevertheless, the declines in all 75 counties exceeded the typical seasonal movement (at the statewide level) of approximately -0.25 percentage points.  The interactive map below summarizes October employment rates and shows the changes for each county from September to October.

A general pattern is evident:  Unemployment rates have fallen below 5% in many counties in the north and west of the state, while the highest unemployment rates are in the south and east.  Madison and Newton Counties had the lowest rates in the state (3.9%), while the highest rates were in Chicot County (10.9%), Ashley County (9.2%), and Phillips County (8.8%).

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Arkansas Employment and Unemployment – October 2020

The latest unemployment data from the U.S. Bureau of Labor Statistics and Arkansas Department of Workforce Services showed a full percentage point decline in Arkansas’ unemployment rate, down from 7.2% (revised) in September to 6.2% in October.

Source: Bureau of Labor Statistics

The decline in October resumes a downward trend that appeared to have stalled in August and September. However, weekly data on unemployment insurance claims suggest that although the trend toward lower unemployment had slowed in late summer, it has continued.  In that respect, the leveling-off in the official unemployment rate in August and September appears to be the anomalous reading.

Source: U.S. Department of Labor

The October decline in the unemployment rate was driven by a sharp decline in the number of unemployed, down more than 14,000 to 83,203.  The number of employed increased by 1,747.  Summing these two changes, the labor force was down by 12,370 for the month.  Statistics on the labor force have been unusually volatile this year, as labor market “churning” has complicated efforts to measure unemployment at any given point in time.  Overall, the labor force is down by approximately 36,000 since February, but has come back from a February-to-July decline of more than 62,000.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

In terms of labor force participation rates, Arkansas stood at 56.5% in October, down 1.7 percentage points since February.  Over the same period, the U.S. participation rate declined by 2.6% to 61.7%.

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm payroll employment increased by 9,700 in October (seasonally adjusted), an increase of 0.8%.  Compared to February, Arkansas payroll employment was down by 45,700, or 3.6%.  The net change for the U.S. over the same period was a decline of 6.6%.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

As shown in the table below, the October employment increases were distributed across most sectors.  There were declines in Government, Wholesale Trade, Mining & Logging, and Information Services, but every other major sector saw employment gains.  Professional and Business Services was up by 2,800 jobs, Leisure and Hospitality Services was up 1,700, and Construction employment was up by 1,000.  Employment in Retail Trade continues to expand:  it was up 3,700 in October, bringing the cumulative change since February to a total net increase of 7,200 jobs.  Employment in Construction and Transportation & Utilities have also moved into positive growth territory since February.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

After declining by 118,800 in March and April, payroll employment has gained back about 73,000 jobs, with a net cumulative decline between February and September of 45,700.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

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2020 Forecast Conference – November 12, 2020

Little Rock Regional Economic Briefing – 2020

Thanks to all the participants and presenters at this years Regional Economic Briefing on November 12.

Use the links below to download copies of the presentation slides.

 


Little Rock Regional Economic Briefing – 2020

The Arkansas Economic Development Institute, based at the University of Arkansas at Little Rock, and the Little Rock Branch of the Federal Reserve Bank of St. Louis will host the Little Rock Regional Economic Briefing Thursday, November 12.

The event will take place virtually this year, from 8-10 a.m. on November 12. The event is free and open to the public, but registration is required at this online link.

Economists will speak on the economic conditions and outlook for the region and the nation. The briefing will be of particular interest to business leaders, academics, and community development practitioners.

The speakers include:

  • Kevin Kliesen, St. Louis Fed research officer and business economist, who will discuss national economic conditions
  • Carlos Silva, Arkansas Economic Development Institute regional economist, who will give the Little Rock metro report
  • Michael Pakko, Arkansas Economic Development Institute chief economist and state economic forecaster, who will talk about the Arkansas economic outlook

“The Little Rock Regional Economic Briefing will include perspectives on the national, state, and regional economies,” Pakko said. “In these very unusual times, the pandemic and efforts to curtail its spread have a profound influence on the economic outlook, and we’ll be focusing in particular on how our economy has fared thus far, and what that portends for the forecast.”

The program also includes a welcome from Robert Hopkins, senior vice president and regional executive of the Little Rock Branch, and a question-and-answer session following the presentations.

For more information, contact Julie Kerr at julie.a.kerr@stls.frb.org or 501-324-8296.

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Arkansas Employment and Unemployment – September 2020

After recovering through the months of May, June and July, continued improvement Arkansas labor markets has slowed.  The unemployment rate ticked slightly lower in September, declining 0.1 percentage point to 7.3%.  However, there has been no statistically significant change in Arkansas’ unemployment rate since July.  The U.S. unemployment rate which peaked at 14.7% in April, fell by half a percentage point in September, declining from 8.4% to 7.9%.

Source: Bureau of Labor Statistics

As shown in the breakdown below, the number of unemployed has hovered just below 100,000 for three months now, falling slightly from 99,517 in August to 97,191 in September. The number of employed also declined in September (-5,391), but not nearly enough to offset the gain from the previous month (+31,032, revised).  Similarly, the labor force contracted slightly in September after surging upward in August.  The labor force data have been particularly volatile, suggesting large movements in and out of the labor force.  Moreover, problems defining labor force status in the presence of temporary furloughs and layoffs has complicated the interpretation of the labor force participation data.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Payroll Employment
Without seasonal adjustment, nonfarm payroll employment increased by 13,200 in September. However, the increase is largely attributable to seasonal increases in educational services in both the private and public sectors.  After seasonal adjustment, private education services were down 800 jobs and total government employment was down by 3,700.  The seasonally adjusted declines indicate that back-to-school employment increases are smaller this year than typically the case for September.

Seasonally adjusted, nonfarm payrolls declined 1,700.  As shown in the third column of the table below, increases in Manufacturing, Education and Health Services, and Leisure and Hospitality Services were noteworthy for continuing the recovery from COVID-related shutdowns earlier in the year.  The increase in manufacturing employment is a welcome improvement from a sector that had remained near its April trough.  The gain in Education and Health Services as entirely attributable to higher employment in Health Care and Social Assistance.  Gains in Leisure and Hospitality show ongoing improvement, but with employment remaining more than 17,000 below the pre-COVID peak.

The cumulative changes shown in the fourth column of the table show that the Wholesale Trade, Retail Trade, and Transportation & Utilities sectors have all moved into positive territory, showing net gains relative to February.  While several sectors continue to operate below capacity and with employment sharply down from earlier in the year, other sectors are showing increasing employment.  In the case of the trade and transportation sectors, it appears that efforts to address logistics and supply-chain problems during the economic shut-down has generated job growth during the period of recovery.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

The trends in payroll employment for Arkansas and the U.S. remain favorable, despite the one-month decline in the Arkansas data for September.  The pace of employment growth nationwide has slowed in recent months, as has growth in Arkansas.  There is more month-to-month variability in state-level employment growth, so it is important to bear in mind that one month of data rarely indicates a change in trend; September’s modest down-tick doesn’t necessarily indicate a stalling of job growth, but rather a slowing of the pace of economic recovery.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Overall, the trends continue to show improvement in both state and national labor markets.  But the pace of the improvement has slowed somewhat as we move into the fall months.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

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Special Reports: Impact of Covid-19 on the Arkansas Economy

Arkansas Consumer Spending During the Pandemic
Sales tax data for Arkansas indicate robust consumer spending in the midst of the pandemic. In this article, we break down available data by county and by sector to seek greater insight into the phenomenon.
Read more…

Forecast Update (July)
“Incoming data have continued to show a more rapid recovery from the COVID-19 shutdowns than previously expected.”
Read more…

Forecast Update (June)
Information since May has suggested that Arkansas has not been as severely impacted as other parts of the country, and that the sharp declines in national employment have abated.
Read more…

Forecast Update (May)
“The economic impact of the COVID-19 pandemic continues to be more rapid and more severe than initially expected… In this updated report we present new projections for the Arkansas economy.”
Read more…

Forecast Update (April)
“In this note we update that forecast with new estimates of the magnitude of the downturn. We also update and extend our previous guidance on how the forecast is likely to impact sales tax receipts of local governments.”
Read more …

Implications for Local Government Sales Tax Collections
“In this note, we focus on consumer spending and the outlook for sales tax collections by county and municipal governments.” Read more…

Arkansas Economic Outlook (March)
“It appears that a dramatic downturn in economic activity over the remainder of 2020 is unavoidable for the nation and for Arkansas.”  Read more…

 

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