The latest data on Arkansas employment and unemployment was released today, including the annual “benchmark revisions” of the payroll employment data.
The information from the household survey showed a slight drop in the unemployment rate. After the December figure was revised from 3.1% to 3.3%, the new data for January show a rate of 3.2%. In both an economic and statistical sense, these small changes in the unemployment rate are not significant. Broadly speaking, however, a rate lower than 3.5% is arguably approaching a lower-bound—a rate low enough that it represents people who are going through brief spells of unemployment between jobs (frictional unemployment).
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS).
The low unemployment rate should be taken in the context of broader measures of labor market activity—the labor force participation rate, for example. As reported in the context of the data revisions on March 3, the proportion of Arkansas population that is engaged in the labor force (either employed or seeking employment) has dropped significantly since the onset of the pandemic-recession in early 2020. The participation rate ticked up from 56.2% to 56.3%, but remains over two percentage points lower than in February 2020.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS).
Payroll Employment
Today’s release included the annual “benchmark revisions” to the data on nonfarm payroll employment. In this regular revision process, the data from the Current Employment Statistics (CES) are benchmarked to fit the more comprehensive Quarterly Census of Employment and Wages (QCEW). In this year’s revision, the Bureau of Labor Statistics also implemented a new model for estimating employment statistics for states and metropolitan areas.
The results of this year’s revision are substantial. Overall, the revised data show much stronger employment growth during 2021. Previously published data indicated that Arkansas payroll employment was still slightly lower than at the onset of the pandemic-recession in February 2020. The revised data showed that we surpassed that level in November. As of January, the revised data show a net increase of 8,900 jobs between February 2020 and January 2022—a gain of approximately 1.0%.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES).
The table below summarizes the previously-published and revised employment data by sector. Several sectors were revised upward, accounting for the positive net change in total nonfarm payroll employment: As of December 2021, estimates of employment in Construction were increased by 3,600 jobs. Employment in Education & Health Services was revised up by 6,100 and Leisure & Hospitality services by 5,000. Another significant upward revision was in Government employment, which was entirely in the Local Government subcomponent reflecting higher estimates of employment at public schools than was previously estimated.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES).
There were some significant downward revisions as well. Overall Manufacturing growth was revised downward by 3,300 jobs. However, this breaks down to a negative 7,900-job revision to durable goods manufacturing and a 3,900-job positive revision to nondurable goods.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES).
As for January, the newly released data show a monthly increase of 4,000 jobs (seasonally adjusted). Most sectors showed positive growth, with the notable exception of Construction, which was down by 700 jobs. In total, nonfarm payroll employment is now reported to have increased by 43,200 jobs since January of 2021, with several sectors showing net gains since the onset of the recession in February 2020.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES).
The revised data suggest that the Arkansas labor market has been exhibiting a much stronger recovery than previously estimated, and is well ahead of the national economy in total employment growth. After incorporating the data revisions and new statistics for January, Arkansas employment is now 1.0% higher than it was in February of 2020. In contrast, the nationwide total remains 1.9% lower than the previous cyclical peak.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES).
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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.
