“… a dismal report”
The February report on state-level employment and unemployment was released by the U.S. Bureau of Labor Statistics and the Arkansas Department of Workforce Services this morning. Set against the backdrop of expectations for a stabilizing employment situation, the Arkansas report is disappointing at best.
The headline news was an increase in the unemployment rate from 7.6 percent in January to 7.7 in February. This is not a substantial change, but the upward creep is unwelcome news. Changes in the underlying components of the unemployment rate highlight the weakness: The number of employed was down by 1,142 and the number of unemployed was up by 1,285.
Not seasonally adjusted, nonfarm payroll employment in Arkansas fell only slightly in February (down by 300 jobs from January). However, as shown in the chart below, January is usually a low point in the seasonal cycle of employment, with February tending to show a rebound as we head for the spring months. After seasonal adjustment, the decline in February was substantial: down 7,300 jobs. In percentage terms, this represents a decline of 0.6%–the third largest drop among the 50 states in February. This is a larger one-month loss than any we observed for Arkansas during the depths of the 2008-09 recession.
The table below summarizes the change in employment by sector. Employment was down in nearly every sector in February. The largest declines were in Trade, Transportation and Utilities; Professional and Business Services; and Other Services. Construction employment continues to fall. In February, construction employment fell below 50,000 (seasonally adjusted) for the first time since January 1999.
There were two relatively positive aspects of the report. First, the data from January were revised to show a larger employment increase than previously reported. As a result, some service-sector categories have shown positive growth, on net, over the first two months of the year. The second positive element of the February report was manufacturing employment, which was up by 1,500 jobs. Manufacturing employment has been experiencing a protracted period of decline. The February increase provides further evidence that the sector is stabilizing.
One should never put too much emphasis on a single month’s observations—and the numbers released this morning are subject to future revision. Nevertheless, taken at face value, today’s data-release represents a dismal report.