Data from the Bureau of Labor Statistics and Department of Workforce Services show the Arkansas unemployment rate ticked up by one-tenth of a percent in December to 7.1%. The number of unemployed was essentially unchanged (+223), while the number of employed declined by over 8,700. After falling by a full percentage point between July 2011 and April 2012, Arkansas’ unemployment rate appears to have plateued over the second half of 2012. As of December, the rate remains 0.7% lower than the U.S. average.
The underlying components of the unemployment rate show a clear change in conditions over the second half of 2012. Although the number of unemployed persons has generally continued to fall, the number of employed has also trended downward. As a result, the labor force has contracted significantly. The period from July 2011 to April 2012 was characterized by an expanding labor force and falling unemployment — a very favorable combination of trends. Since April, however, the decline in the labor force has nearly erased all of the increase that had previously taken place after Arkansas labor markets began to recover at the beginning of 2010.
Nonfarm payroll employment was also down in December, falling by 3,000 (seasonally adjusted). Compared to the previous month, employment was down in Manufacturing, Financial Services, Education & Health Services, Leisure & Hospitality Services, and in each of the sub-sectors comprising Trade, Transportation & Utilities. The only notable increases were in Professional & Business Services, Other Services, and Construction. In the case of Construction, the not-seasonally-adjusted data actually showed a slight decrease — but it was a smaller decline than would typically be expected in December. Over the course of the year, total payroll employment rose by 7,700 — a movement in the right direction, but too small to drive any significant progress toward full employment.
Today’s data release was the last scheduled until March 1st, when we’ll see newly-revised statistics. Based on the underlying data from the Quarterly Census of Wages and Employment (QCEW), we expect that there will be some significant upward revisions to the Arkansas payroll statistics. However, the revisions primarily affect the data for late 2011 and early 2012. Hence, the revised payroll data are expected to be more consistent with the patterns we’ve seen in the data from the household survey — improving conditions up until the spring of 2012, but a stagnant labor market situation since then.
# # #*Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, are available here: Table – Seasonally Adjusted NFPE.