The employment and unemployment report for February was unambiguously positive. For the second month, the unemployment rate declined by more than one-tenth of a percent: Following a 0.3% decline in January, the rate dropped another 0.2% in February, to 4.2%. A one-half percent decline in unemployment in Arkansas is literally unprecedented (at least going back as far as 1976).
The February decline in the unemployment rate was underpinned by a significant increase in the number of employed Arkansans (+10,702) and a decline in the number of unemployed (-2,342). The first two months of 2016 have seen some remarkable changes in these statistics, but even over a longer period, the trends are clearly positive. Over the most recent six months, the household survey has shown employment gains averaging over 5,000 per month, and average declines in the number of unemployed by over 1,700 per month. It is quite likely that some of the recent statistics will ultimately be revised to smooth out some of the unusually large changes, but the data clearly show encouraging trends.
The report on nonfarm payroll employment was similarly upbeat. Total payroll employment rose by 6,100 in February (seasonally adjusted). Moreover, the data from January were revised upward by approximately 1,000 jobs. The recent payroll data have shown more volatility than the household employment statistics, but still indicate positive trends. Over the past six months, payroll employment gains have averaged approximately 2,700 per month.
The table below shows that February’s employment gains were broad based. Sizable gains were recorded for Leisure & Hospitality Services, Transportation & Utilities, and Retail Trade. Construction employment also showed a strong increase. Combined with a monthly rises in Manufacturing employment, goods-producing sectors contributed positively to the month’s employment increase.
Compared to February of 2015, payroll employment has increased by 27,900 jobs–a 2.3% rate of expansion. The only sectors to have lost jobs over that period are Mining & Logging (which has been affected by a slowdown in energy-producing activities) and Manufacturing (which has been subject to a long-term downward trend). Employment in service sectors and in Retail Trade have accounted for the bulk of employment growth over the past year — and over the course of the entire economic expansion for that matter. With the recent increases, statewide employment is now 21,400 higher than it was before the recession hit in 2008.
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*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, can be found here: Table-Seasonally Adjusted NFPE.