The Arkansas unemployment rate was in February was 7.2%, unchanged from the previous month. New data from the Bureau of Labor Statistics and Department of Workforce Services showed that the number of unemployed declined by nearly 600, partly offsetting the January increase. However, the February household survey also showed a sharp decline in employment for a second consecutive month. The two-month decline in employment with little change in unemployment implies a sharp contraction of the labor force. This was the for 13th consecutive monthly decline in the size of the labor force, with an apparent acceleration of the trend during the first two months of 2013. Since January 2012, the labor force has fallen by more than 30,000 — about 2.2%.
Nonfarm payroll employment was up by 2,800 in February (seasonally adjusted*). For the first two months of the year, payroll employment rose by only 600, and is essentially unchanged (+800) from October of 2012. As detailed in the table below, employment was up for the month in each of the goods-producing sectors and in most of the service-providing sectors as well. The only monthly declines were in Information Services, Financial Services, and Other Services. Employment in most sectors has increased over the past year, and most have shown positive growth since the post-recession employment trough of February 2010. Notable exceptions are Construction, Manufacturing, Information Services, and Other Services. Overall, employment is up 31,000 since the February 2010, a recovery of approximately 54% of the jobs that were lost during the recession.
The overall employment trends indicated by the household survey and the payroll survey have been diverging in the first part of 2013. As shown in the figure below, the two data sources rarely provide identical signals about short-term employment changes, yet they generally show similar trends. However, the sharp decline in household employment in January and February clearly contrasts with the relatively unchanged employment profile suggested by the payroll survey. Ordinarily, economists tend to rely more on the payroll figures as providing a more complete and accurate assessment of labor market conditions. But as we have recently seen, the payroll employment statistics are preliminary and subject to future revision. As additional employment data are released in the coming weeks and months, we’ll be closely monitoring the relative performance of the household and payroll employment statistics, seeking to reconcile the conflicting signals they seem presently to be providing.
# # #*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.