The latest data from the U.S. Bureau of Labor Statistics and the Arkansas Division of Workforce services show robust labor market activity took place in August. Unemployment continued its downward trend, and both the household and payroll data showed new record-high levels for employment.

The headline news was that the Arkansas unemployment rate dipped below 4% in August, dropping from 4.0% in July to 3.9% in August. The U.S. unemployment rate had previously been announced to have been steady at 4.1% in August. Although Arkansas’ rate is again falling below the U.S. rate, the difference is not statistically significant.

The driving force was another month showing fewer unemployed workers. The number of unemployed was down 1,780 in August, and has fallen cumulatively by 6,712 since January. Employment rose by 1,972 for the month. With the number of unemployed declining by nearly as much as the number of employed increased, the net effect on the labor force was an increase of only 192.

With the relatively small increase in the labor force, the participation rate ticked downward by 0.1 percentage points. After rising steadily from 2023 through 2025, Arkansas’ participation rate seems to have leveled-off at just over 59% in 2026.

Payroll Employment
Arkansas nonfarm payroll employment surged by 5,100 jobs in August (seasonally adjusted). The not-seasonally adjusted data from Arkansas Division of Workforce services showed an increase of 12,200, but much of that was purely seasonal, reflecting the start of the school year. After seasonal adjustment the increase is still robust for a one month change. Today’s release also showed an upward revision to July employment: originally reported as a decline of 1,500 jobs, the revised data show an increase of 100. U.S. payroll employment also showed an unexpectedly large increase for August, but not nearly as much, proportionately as the increase in Arkansas.

The increase in employment was spread across most sectors, with Nondurables Manufacturing, Professional & Business Services, and Other Services showing monthly declines. Notable employment increases were reported for Education & Health Services and Leisure & Hospitality Services. Retail Trade and Financial Services also showed gains.

Year-over-year changes in employment had recently slowed to near zero, but August’s strong performance raises that to 7,800 jobs over the past 12 months–about 0.6% By comparison, payroll growth for the U.S. over the same period was 0.4%. In the Year-over-year data, Leisure & Hospitality Services have shown the largest absolute increase (+4,200) followed by Retail Trade (+1,800) and Construction (+1,500).

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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.

Arkansas’ unemployment rate declined from 4.1% in June to 4.0% in July, remaining 0.1 percentage points lower than the U.S. average (a difference that is not statistically significant). The state and national unemployment rates are tracking closely together.

The declining unemployment rate since January has reflected six consecutive months of declines in the number of unemployed workers. That number was down 972 in July, and down a cumulative total of nearly 5,000 (-4,939) since January. Meanwhile, the number of employed workers in the household survey increased by 1,135 in July, up a cumulative total of 11,466 since January. The net increase in the total labor force was +163 in July.

The steady gains in the size of the labor force have outpaced estimated population growth, resulting in a rising labor force participation rate. Over the past twelve months, the Arkansas participation rate has increased by 0.6 percentage points. Over the same period, the U.S. labor force participation rate has declined by by 0.8 percentage points.

Payroll Employment
Nonfarm payroll employment declined by 1,500 jobs in July (seasonally adjusted). The data released by the Arkansas Division of Workforce Services, which is not seasonally adjusted, showed a steeper decline of 16,500 jobs. The major seasonal component accounting for the difference is the typical mid-summer decline in employment at schools and universities.

The seasonally adjusted data show declines in a number of sectors, with the largest monthly declines in Professional & Business Services and Leisure and Hospitality Services. Transportation & Utilities and Construction both showed notable increases for the month.

Over the past year, Arkansas nonfarm payrolls have only increased by 1,900 jobs, a percentage increase of a little over 0.1%. The slowdown in payroll employment growth generally tracks along with the national average. Over the past 12 months, U.S. payrolls have expanded by 0.2%.

Measures of household and payroll employment for Arkansas have diverged significantly over the past year, with the household data showing an increase of 1.7%. It’s not unusual for the two measures to diverge somewhat, but persistent differences like those observed over the past year indicate a likelihood that future revisions to the data will reconcile the two. In the meantime, the payroll data is generally considered to be the more accurate indicator.

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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.

In the latest report on state-level employment and unemployment, the household survey shows continuing employment growth and a downtick in the unemployment rate. However, the payroll survey shows a fairly sharp monthly decline.

The unemployment rate declined from 4.2% in May to 4.1% in June. The U.S. unemployment rate was previously reported to have declined from 4.3% to 4.2%. Arkansas continues to closely track the national unemployment rate.

The underlying components of the unemployment rate all continued to show positive trends. The number of unemployed was down by 911—the fifth consecutive monthly decline. Meanwhile, the number of employed continued an increasing trend, as did the total labor force.

Payroll Employment
In contrast to the household measure of employment, nonfarm payroll employment declined in June. Total employment dropped by 2,200 to 1,343,000–the lowest reading for Arkansas nonfarm payrolls since November 2025 (seasonally adjusted data).

Employment in goods-producing sectors increased in June, while the weakness was concentrated in service-providing sectors—many of which have been driving positive employment growth in recent months. The largest decline was in Educational & Health Services; however, the drop was entirely attributable to Educational Services. Health Care & Social Assistance was basically unchanged for the month (+100). Wholesale Trade, Retail Trade, and Financial Services were all down.

Compared to June of 2026, total payroll employment was up by 4,700, representing a year-over-year growth rate of 0.4%. Over the same period, U.S. payrolls expanded by only 0.3%. Both state and national payroll growth have been steadily slowing over time, with growth rates of less than 1.0% since at least the early months of 2025.

The contrast between short term movements in household employment and payroll employment continue to present a puzzle. The two measures can deviate significantly over relatively short time periods, but we expect them to reflect common trends over time and with data revisions. The question is, therefore, is household employment overstating growth, or is payroll employment understating it? We will continue to monitor these developments.

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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.

The latest data on state-level employment and unemployment suggest an emerging downtrend in Arkansas unemployment, along with continued steady employment growth.

In the household survey data the unemployment rate ticked down one tenth of a percent from 4.3% in April to 4.2% in May. The national unemployment rate held steady at 4.3% for the month. Having increased through most of 2025, the Arkansas unemployment rate has come down slightly to now be only 0.2 percentage points higher than a year ago.

In the Arkansas data, the number of unemployed declined for a fourth consecutive month, falling by 1,285 in May, and over 3,000 since January. The number of employed was also up in May, increasing by 2,452. As a result, the labor force expanded by 1,167. Compared to May of 2025, Arkansas employment is is up by 21,532, while unemployment is higher by 3,942.

Payroll Employment
Nonfarm payroll employment increased by 600 in May, and was revised up by 800 in the data for April (seasonally adjusted data).

Professional & Business Services showed strong growth, with contributions from both the Professional, Scientific, & Technical and Administrative & Support categories showing increases. Wholesale Trade and Durable Goods Manufacturing also showed monthly increases. On the other hand, employment in Nondurables Manufacturing was down in May, along with Education & Health Services (representing an unexpected stalling of trend growth).

Over the past 12 months, payroll employment has increased by less than 6,000 jobs, amounting to a growth rate of 0.4%. Over the same period, the growth rate of U.S. employment has been approximately 0.3%.

With the household survey showing an annual increase of over 21,000 employed and the payroll survey indicating an increase of less than 6,000 jobs, the two elements of the monthly employment report are tending to diverge. This is not unusual, but we would typically expect the trends to realign over time and with revisions to the data. Although the household survey might be overstating growth or the payroll survey understating it, both measures indicate ongoing positive growth.

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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.