Many economists have been predicting weakening economic conditions as the Federal Reserve hikes interest rates to fight inflation, but the impact on labor markets has not yet materialized. The data for the final month of the year (released yesterday) revealed stable labor markets both nationwide and here in Arkansas. The unemployment rate for Arkansas ticked down from 3.7% to 3.6% in December as the number of unemployed Arkansans fell for the first time in nine months (-333). Household employment and labor market participation both increased in December (by 596 and 263, respectively), interrupting six-month gradual downtrends. National data released two weeks ago showed that the U.S. unemployment rate declined from 3.6% to 3.5% in December.
From the establishment survey, nonfarm payroll employment was up 2,300 in December (seasonally adjusted). Gains and losses across sectors were mixed. Sectors with higher employment included Construction, Durables Manufacturing, Transportation and Utilities, and Other Services. Small declines were reported for Nondurables Manufacturing and a handful of service-providing sectors.
Compared to December 2021, payroll employment was up by 18,800—about 1.4%. The only sectors that showed negative growth over the past 12 months were Mining and Logging, Construction, Retail Trade, and Professional & Business Services. The latter two declines suggest a 2022 holiday shopping season somewhat less robust than in 2021. Relative to the pre-pandemic peak in February 2020, Arkansas payroll employment is up by 25,400, or 2.1%. For the entire U.S., December payroll employment was 0.8% higher than in February 2020.
This is the last state employment report before the annual data revision process. We’ll be back in March with revised statistics for both the household and payroll survey data.
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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.