The employment report for March showed the Arkansas unemployment rate unchanged at 3.1% and a negligible change in total payroll employment.
The headline unemployment rate was unchanged, although the number of unemployed dropped by approximately 750 and employment increased by 5,225. This was the third consecutive month that household employment increased by more than 5,000. Driven by the higher employment, the Arkansas labor force expanded by 4,508 in March and has increased by 13,500 since December of 2021.
The U.S. unemployment rate had previously been reported to have declined from 3.8% in February to 3.6% in March. Although the Arkansas unemployment rate is still one-half percentage point lower than the national average, the difference has narrowed to the point that there is no statistically significant difference between the state and national rates.
As a result of the strong household employment growth of the past three months, Arkansas’ labor force participation rate has risen from 56.2% in December 2021 to 56.6% in March. Despite the recent recovery, the participation rate remains nearly two percentage points lower than in February 2020. The participation rate for the U.S. has also been sluggish, but is down only one percent from the previous cyclical peak.
Note, however, that the household measure of employment continues to show significantly slower cumulative growth since the onset of the pandemic-recession than the payroll measure (see below). To the extent that household employment statistics are understating employment growth, the state’s labor force participation rate could be biased downward.
Nonfarm payroll employment was little-change in March declining by 300 jobs (seasonally adjusted). Sectors with employment declines included Education and Health Services, Professional and Business Services, and Retail Trade. Within Education & Health, job losses were entirely attributable to Health Care and Social Assistance. The decline in Professional & Business Services was concentrated in Administrative & Support services. Other sectors saw employment increases, including Transportation & Utilities, and Leisure and Hospitality Services.
Over the past 12 months, the only sectors showing net employment declines are Health Services, Other Services, and Mining & Logging. Compared the peak month of February 2020, most sectors are now in positive territory (or close) with the notable exceptions of Leisure and Hospitality Services and Government (where the declines are associated with state and local public education).
Although the pace of payroll employment growth has slowed in Arkansas, the cumulative change since the onset of the pandemic-recession is slightly positive (+0.9%). In comparison, U.S. payroll employment remains 1.0% lower than in February 2020.
Household vs. Payroll Employment
Recent strong gains in the household measure of employment have brought the year-over-year increases in the two measures of employment close to parity: From March 2021, household employment is up 31,600 and payroll employment is up 35,300. Nevertheless, the household measure has yet to show significant recovery from the pandemic-recession downturn. Since April 2020, payroll employment has expanded by 140,400 and household employment by only 59,908.
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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.