The latest employment report for Arkansas shows another decline in the unemployment rate, with the rate falling from 3.2% in January to 3.1% in February. The Arkansas unemployment rate was previously reported to be as low as 3.1% back in December, but that low-point was revised away. With the new, revised data set, February’s rate sets a new record low for the series. Arkansas was one of nine states that set new record lows in February. The U.S. unemployment rate was previously reported to have declined 0.2 percentage points to 3.8% in February.
Source: Bureau of Labor Statistics
The underlying components of the unemployment rate showed the number of unemployed down by 459 and the number of employed up by 5,028. The large increase in employment raised the labor force estimate by 4,569.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics
Over the past year, the household survey shows an increase in employment of over 28,000; however, by this measure, employment in Arkansas remains more than 22,000 below the peak of February 2020. In this regard, the employment estimates from the household survey are showing a considerably different view than the payroll survey (more below).
Payroll Employment
Nonfarm payroll employment in February was essentially unchanged from the previous month. On a seasonally adjusted basis, payroll employment declined by 500 jobs (about 0.04%). The monthly change was predominated by a decline in Business and Professional Services. The drop was entirely accounted for in the category of Administrative & Support, which includes temporary workers. Other sectors showed healthy gains, including Manufacturing, Retail Trade, Transportation & Utilities, Health Services, and Leisure & Hospitality services.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
Over the past year, nonfarm payroll employment has expanded by 46,100 jobs, and is now 12,800 higher than at the peak of February 2020. As mentioned above, these numbers differ considerably from employment as estimated by the household survey. Household employment dropped by only 5.8% from February to April 2020, while payroll employment declined by 10.0%. Since then, household employment has shown considerably slower growth. Indeed, as illustrated in the figure below, the two measures of employment have switched in relative magnitude, with the payroll employment estimate recently running higher than the household estimate.
Source: Bureau of Labor Statistics
There are differences in the coverage of the two employment series that could conceivably account for their differing patterns of behavior. First, the household survey is typically higher than the payroll survey because the former includes agricultural workers as well as self-employed and workers in private households. The relatively slow growth of household employment might indicate declines in these categories of employment. Another difference is that the payroll survey treats multiple job-holders as multiple jobs, whereas the household survey counts the worker only as employed or unemployed. Hence, a dramatic increase in multiple job holders could help explain the higher growth path for nonfarm payroll employment.
It seems unlikely that these factors can account for the divergent growth paths. Due to the larger sampling errors and a dependence on modeling, the state-level estimates of household employment are generally subject to greater uncertainty. Until more information is incorporated and data are revised again next year, the data from the payroll survey should be considered more reliable.
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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.
