The newest reports on employment and unemployment in Arkansas indicate some signs of weakening conditions in the state’s labor markets, but payroll employment continues to expand at a healthy pace.
The headline news was an increase in the unemployment rate from 3.3% to 3.4%. In light of the 0.2 percentage point increase in the national unemployment rate in August (to 3.7%), it is not surprising to see Arkansas’ rate edge up slightly as well.
Source: Bureau of Labor Statistics
The increase in the unemployment rate reflected an increase of 1,020 in the number of unemployed and a decline of 2,648 in the number of employed. August was the fifth consecutive month of increasing numbers of unemployed persons, up a total of 4,177 since March. The decline in the number of employed represents a departure from the rising employment trend that had prevailed since December of 2021. With the decline in employment exceeding the increase in unemployment, the total labor force (and the labor force participation rate) declined for the month.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Although the overall trend in the number of employed has been increasing for over two years, the household employment series has yet to recover to pre-pandemic levels.
Payroll Employment
In contrast to the relatively sluggish growth of household employment, nonfarm payroll employment continues to register strong gains. For August, payroll employment was up 3,700 and the gain for July was revised higher by 1,700 jobs (seasonally adjusted data). Although nonfarm payroll employment growth was sluggish in the early months of the year, there have been 13,400 net new jobs created since March—an increase of 1.0%.
Employment growth in service-providing sectors was generally strong in August; however, there were job losses in Construction, as well as in the Trade, Transportation and Utilities super-sector. Job gains were particularly strong in some of the sectors that have struggled to recover from the pandemic-recession, including Leisure and Hospitality Services (+1,100 jobs) and Other Services (+1,500 jobs).
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
Compared to a year ago, payroll employment is up 39,000 or 3.0%.the only sectors that have contracted over the past year are Mining & Logging, Construction, and Retail Trade. Relative to the business-cycle peak of February 2020, most sectors have shown net increases, with the exceptions of Leisure and Hospitality Services and Other Services. Government employment is still down significantly from pre-pandemic levels, primarily reflecting employment in public schools, colleges and universities.
JOLTS Data
New state-level data from the Job Openings and Labor Turnover Survey (JOLTS) was also released this morning. Lagging the employment figures by one month, today’s report for July suggested some leading indicators of slightly weakening conditions.
Todays JOLTS report noted that Arkansas was among the states with the largest decline in job openings for the month (both in terms of numbers and rates). As a result, the number of job openings per unemployed worker fell below 2.0 for the first time this year.
Source: Bureau of Labor Statistics, Job Openings and Labor Turnover Survey (JOLTS)
The JOLTS report also cited Arkansas as one of the states that showed a statistically significant decline in job separations, with the Separation Rate falling from 4.7% of the total number employed to 4.1%. The decline in separations was concentrated in the Quits Rate, which fell from 3.5% to 3.0%. Although the month-to-month decline in quits was statistically significant, the trend remains high, consistent with an ongoing process of labor market churning that has come to be known as “the great resignation.” The Quits Rate for Arkansas remains well above the national average.
Source: Bureau of Labor Statistics, Job Openings and Labor Turnover Survey (JOLTS)
The decline in Job Openings, Quits, and overall Separations indicate some narrowing of the gap between job openings and available workers, and also suggest that the labor force might be settling into a more stable expansion path.
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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.
