The February state employment report from the Bureau of Labor Statistics was a strong report for Arkansas overall. The headline statistic was another decline in the state’s unemployment rate, down to 3.7%. That represents a new record low for Arkansas’ unemployment rate, and is one full percentage point lower than the U.S. unemployment rate for February.
The underlying data from the household survey showed that the number of unemployed Arkansans declined by over one thousand, while the number employed rose nearly 2,500. After drifting downward for the past 10 months, the labor force increased by 1,346 in February.
With the Arkansas unemployment rate hitting new record lows, it is useful to note that changes in labor force participation rates have complicated the interpretation of the unemployment statistics. When the state’s unemployment rate was at a cyclical low of around 5% before the 2008-09 recession, the labor force participation rate in Arkansas was as high as 64%. The participation rate has fallen sharply since that time and is currently near 58%. That is, the fraction of the state’s population that is employed or even looking for work now has fallen by around 5-6% over the past decade. If the workers how have dropped out of the labor force were to be considered officially “unemployed,” the current unemployment rate would be approximately 12%.
Nonfarm payroll employment rose sharply in February, up by 6,100 (seasonally adjusted*). The percentage increase for the month (o.5%) was the second-fastest growth rate in the nation (Montana and Nebraska saw increases of 0.6%). Moreover, the employment total for January was revised upward by nearly 2,000 jobs.
Job growth was distributed across a wide range of sectors. Goods-producing sectors, in particular, had a very strong month, with Mining and Logging, Construction and Manufacturing all posting gains. On the service-providing side, Professional & Business Services and Education & Health Services continued to expand at a healthy pace.
Over the past 12 months, Arkansas payrolls have expanded by 16,300 — a growth pace of about 1.3%. Over the same period, U.S. job growth has been around 1.6%.
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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.