The state employment report for October reinforces suggestions of a slight weakening of labor market conditions that were indicated by the data of the past two months. The unemployment rate increased for the third consecutive month, while employment surveys showed declines for the month.
The headline measure, the unemployment rate, rose by 0.2 percentage points to 3.1% in October. The national unemployment rate was previously reported as increasing 0.1 percentage points to 3.9% in October. Despite a slight narrowing of the gap between the two, Arkansas’ rate remains significantly lower (in a statistical sense) than the U.S. rate.
Although the Arkansas unemployment rate is one-half of a percentage point higher than in June and July, a rate of 3.1% matches the record-low prior to 2023. Similarly, the number of unemployed, which rose by 2,616 to 42,549 in October, remains lower than at any time prior to this year.
The October report also showed a decline in employment (-1,813) following two months of slow growth. The combination of the increase in the number of unemployed and decline in the number of employed resulted in a net increase in the labor force, continuing its upward trend and setting a new all-time high.
Nonfarm payroll employment declined by 3,500 in October, following a decline of 3,700 (revised) in September (seasonally adjusted data). The two months of decline offset some of the gains from the summer months, but total payroll employment remains higher than it was at the beginning of the year. Compared to October 2022, employment is up by 12,800 jobs.
The downturn in October was broad-based, with lower employment in several good-producing and service providing sectors. One notable exception was Construction employment, which increased by 800, and is up 7,700 compared to a year ago. Government employment was also higher in October, up by 600 compared to the previous month and up 1,400 from a year ago. Several service sectors that had been showing strong growth showed downturns in October, including Professional & Business, Education & Health, and Leisure & Hospitality services.
The net gain of 12,800 jobs over the past twelve months translates to a growth rate of 0.9%. Over the same period, U.S. payroll employment is up by 1.9%. Since the onset of the pandemic in February 2020, Arkansas employment is up by 5.2%, while the U.S. net increase is 3.0%.
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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.