On its surface, the latest data on Arkansas employment and unemployment might appear disappointing, but the data also point to some positive developments.
The unemployment rate increased slightly, rising from 3.2% in June to 3.3% in July. Even with the uptick, the unemployment rate is still extraordinarily low and remains below the national unemployment rate (although the difference is not statistically significant).
Underlying the change in the unemployment rate, the data show that the number of unemployed Arkansans increased by 1,084 while the number of employed was essentially unchanged (-36). The rising number of unemployed is certainly a concern, particularly in the context of July being the fourth consecutive month of increase. On the other hand, the labor force has continued to expand. As net new entrants to the labor force expand the pool of workers, it is not surprising to see a transitory increase in the number of unemployed. Meanwhile, the stalling of employment growth in July appears to be more of a pause in steady growth, rather than a change in trend.
The monthly press release from the Arkansas Division of Workforce Services reported a net decline of 2,900 jobs in July. However, that not-seasonally adjusted number includes 10,800 in government employment, primarily reflecting the summer break at public schools and universities. Net of this sharp, but perfectly explicable and expected decline, payroll employment in other sectors showed healthy increases.
Looking at the seasonally adjusted data, Nonfarm Payroll Employment increased by 11,200 jobs, an increase of 0.9%. The news release from the Bureau of Labor Statistics noted that Arkansas had the second-largest percentage increase of employment in the nation (Hawaii’s growth for the month was 1.3% and Missouri tied with Arkansas at 0.9%). Increases were evident in nearly every sector, including seasonally-adjusted government employment. Gains were particularly notable in Health Services and Leisure & Hospitality Services. As a whole, the Trade, Transportation & Utilities super-sector gained 1,600 jobs Goods-producing industries also added jobs in July, with increases in Construction and both Durable- and Non-Durable manufacturing sectors expanding.
Compared to July 2021, payroll employment is up 36,600 jobs—an increase of greater than 2.8%. Some sectors are down from their highs from the summer of 2021, including Construction and Retail Trade. However, most sectors have shown significant growth, particularly those that continue to recover from the pandemic/recession (e.g. Leisure and Hospitality Services, Health Services and Transportation).
With the July increase of 11,200 jobs, along with an upward revision of 1,500 to June’s total, payroll employment is now 14,800 (2.0%) above the pre-pandemic/recession month of February 2020. Nationwide, payroll employment surpassed its February 2020 peak for the first time (barely) in July.
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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.