It has been widely anticipated that the recent increases in interest rates would result in weaker labor markets. In Arkansas, at least, there is little sign of deteriorating conditions—quite the opposite, in fact. Today’s report from the Bureau of Labor Statistics shows a decline in the unemployment rate from 3.2% in February to 3.0% in March. Arkansas was one of seven states that set new record lows for unemployment (since the series began in 1976). The national unemployment rate was previously reported to have declined by 0.1 percent to 3.5% in March.
The decline in Arkansas’ unemployment rate was underpinned by a sharp decline in the number of unemployed (-2,833) and an increase in the number employed (+4,661). Consequently, the labor force (the denominator of the unemployment rate) increased by 1,828.
Nonfarm payroll employment increased by 400 jobs from February to March (seasonally adjusted). Compared to March 2022, employment has increased by 32,400 (about 2.5%). Since the previous peak in February 2020, payroll employment has expanded by 58,700 jobs or 4.6%. In comparison, total U.S. payroll employment has shown a net increase of 2.1% over the same period.
A breakdown of employment growth by sector shows that the March increase included expansions in Construction, Retail Trade, and Other Services. Sectors with employment declines included Wholesale Trade, Transportation & Utilities, and Professional & Business Services (entirely in the Administrative & Support Services category).
Year-over-year employment gains are especially prominent in service-providing sectors—particularly in Education & Health Services and Leisure & Hospitality services (which were among the hardest-hit sectors during the Covid contraction). Other prominent gains include Construction; Wholesale Trade; and Transportation & Utilities.
JOLTS Data from February
Earlier this week, new state-level data from the Job Openings and Labor Turnover Survey (JOLTS) were released. The data for Arkansas reinforce the view that the state’s labor markets remain robust. For example, while there has been some indication of a lower ratio of job openings to unemployed workers in the nationwide data, the ratio has recently increased in Arkansas and was at 2.4 in February (the U.S. ratio was 1.7 in February).
Similarly, the dynamism of Arkansas’ labor markets remains historically robust. The Quit Rate (voluntary job-separations per number of employed) has been trending downward nationwide, but remains well above 3% in Arkansas, with increases in recent months. Sometimes referred to as the “great resignation,” this statistic suggests that workers continue to perceive opportunities for job-changes.
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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.