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Metro Area Unemployment Rates – Seasonally Adjusted

The  smoothed seasonally adjusted unemployment rate estimates have been updated by the BLS.  As described in a previous post,  the smoothed seasonally adjusted (SSA) estimates are processed using an algorithm that incorporates a long-run trend smoothing procedure.  Hence, the estimates show less month-to-month variability than data that produced using only seasonal adjustment techniques.

The table below shows that unemployment rates declined in all of Arkansas MSAs in January.  The largest monthly declines (-0.4 percentage points) were registered for Fayetteville, Memphis, and Pine Bluff. 

Source: Bureau of Labor Statistics

As shown in the figure below, the month-over-month declines in unemployment continue a trend that emerged in the final months of 2011.  The recent declines have largely reversed the run-up in unemployment rates that we saw during the summer months.

Source: Bureau of Labor Statistics

Metro Area Employment and Unemployment – January 2012

New data on metro area employment and unemployment came out this morning.  The BLS news release noted that  “Unemployment rates were lower in January than a year earlier in 345 of the 372
metropolitan areas.”  All of Arkansas’ MSAs were included in this total.  The changes ranged from down 0.3 percentage points in Fort Smith and Jonesboro to down 0.9 in the Memphis MSA.  The not seasonally adjusted data showed increases from December unemployment rates, but these largely represented seasonal effects associated with the end of the holiday shopping season.  Smoothed seasonally adjusted unemployment rates will be available later in the day.

Source: Bureau of Labor Statistics

The seasonally-adjusted nonfarm payroll employment data (which reflect the recent benchmark revisions) show monthly employment increases in six of Arkansas MSAs.  Fort Smith and Memphis both saw monthly declines.  Compared to the previous year, employment was up in all metro areas except Fort Smith.  In fact, the  BLS news release reported that Fort Smith had both the highest number of job losses and highest percentage decrease of all the nation’s MSAs.

Source: Bureau of Labor Statistics

Since the beginning of the recession in December 2007, net employment changes are positive only in Jonesboro and Texarkana.  Net employment losses in the other metro areas of the state range from 1.5% in Fayetteville to 12.8% in Fort Smith.

Employment Data Revisions – Some Additional Details

Yesterday’s employment report included the annual benchmark revisions to the payroll employment data.  Each year, the numbers in the Current Employment Statistics (CES) data set are updated to reflect more accurate figures from the Quarterly Census of Employment and Wages (QCEW).  This year’s revision “benchmarked” the CES data to levels consistent with the QCEW as of 2011:Q1.  In addition, data from the QCEW itself were revised for the period covering last year’s benchmarking.  Hence, the revision process affects employment growth estimates for both 2010 and 2011.  (New seasonal factors are also estimated for the period 1990-present, but revisions from this source are generally small.)

The table below shows employment growth by sector for 2010 and 2011 (seasonally adjusted data).  The first two columns report the data as previously published (as of January 2012).  The second two columns show the revised data that came out yesterday.  The first line shows that total employment growth in Arkansas was revised downward in both years.  Employment growth in 2010 was marked down from 12,600 to 8,600 jobs.  The revision for 2011 was even more substantial:  The previously-published data showed an increase of 8,000 jobs for the year, whereas the revised data show a loss of 3,100 jobs.

Source: Bureau of Labor Statistics

The substantial mark-down in employment growth for 2011 was not attributable to any one sector.  Several sectors were subject to sharp downward revision, including Contruction, Manufacturing (particularly Non-durable Goods), Wholesale Trade, Financial Activities, Education & Health Services, and Leisure & Hospitality.  A few sectors added more jobs than we had previously thought:    Retail Trade and Durable Goods Manufacturing are two examples.

The next table shows the revisions to employment growth in the state’s Metropolitan Statistical Areas (MSAs).  The most substantial revision was for Fort Smith.  Previously-published data had shown that Fort Smith lost 1,700 jobs in 2011.  The revised data show job losses totalling 7,700.  Data for Hot Springs were also subject to a substantial revision:  Job growth of 1,500 was marked down to zero for 2011, and a small gain in the previous year was revised to show a net job loss.    In contrast, data for Jonesboro were revised upward for both years. 

Revisions to the data for the state’s two largest MSAs were relatively minor.  Northwest Arkansas saw a very small downward revision for 2010 and an upward revision for 2011.  In Central Arkansas job growth was revised slightly downward for both years.  In both MSAs, employment growth remained positive for both years.

Source: Bureau of Labor Statistics

Of course, even the revised data are subject to further revision.  This time next year we’ll see yet another version of the job-growth statistics for 2011.

Arkansas Employment and Unemployment – January 2012

The latest employment report from the U.S. Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) show that the unemployment rate in Arkansas fell by 0.2 percentage points in January to 7.6%.  This was the fourth consecutive monthly decline.  The Arkansas unemployment rate is now 0.6 percentage points lower than its (revised) peak of 8.2 in July 2011.

Source: Bureau of Labor Statistics

The  underlying details in the January unemployment report support a positive interpretation:  The number of employed persons was up by nearly 6000, while the  number of unemployed was down almost 2000.  As a result, the unemployment rate decline occurred against a backdrop of a substantial expansion of the labor force.   Since the unemployment rate peak in July 2011, the number of employed has risen by nearly 24,000 and the number of unemployed is down 6200.

The independent payroll survey showed modest job gains for the month, with increases spread across several sectors.  Although the not-seasonally-adjusted data showed a net decline for the month, the job losses were largely seasonal as holiday-related employment declined (particularly in the Retail Trade and Leisure & Hospitality sectors).  Seasonally adjusted data showed an increase of 4600 jobs for the month. Goods producing sectors saw an increase of 2300 jobs, with most of the gains in construction. Service providing sectors showing gains included Trade, Transportation & Utilities (+2200), Education & Health (+1700), and Leisure & Hospitality (+1700).  These increases were partly offset by notable job-losses in Professional & Business Services (-1100) and Government (-2100).

Source: Bureau of Labor Statistics

Compared to a year ago, the newly-revised payroll data show a net increase of 4300 jobs.  Education & Health Services continued to be the strongest-performing sector over the past 12 months, adding 4000 jobs.  In contrast, manufacturing employment has fallen by 4600 jobs.

Benchmark Revisions

This monthly report on payroll employment included the annual benchmark revisions to the data.  As previously reported, we were anticipating a sharp downward revision to the jobs data for early 2011.  As of the new benchmark date (2011:Q1) we expected to see a downward revision of approximately 11,000 jobs.  The actual revision was down 10,400.  Estimation of new seasonal factors and updated source-data also resulted in a downward revision to the third-quarter statistics.  At the end of 2011 (December) total payroll employment is now estimated to have been 1161.3 thousand, down 14.3 thousand from the previously-estimated 1175.6 thousand.  The revised data now show that 2011 was a year of negative net employment growth.  From December 2010 through December 2011, total payroll employment in Arkansas fell by about 3,100 jobs.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

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*Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, are available hereTable – Seasonally Adjusted NFPE.

Unemployment Rate Revisions

Next week we’ll see the results of the long-awaited benchmark revisions to payroll employment data for Arkansas.  In the meantime, the Bureau of Labor Statistics (BLS) has completed its annual revision of the Local Area Unemployment Statistics (LAUS).  Data for the LAUS are based on the same concepts and definitions as the national unemployment rate figures, but are calculated using statistical models that incorporate information from a number of sources.  Each year, the BLS revises labor force and unemployment data to incorporate updated population data, other data revisions, and reestimation of statistical models.

The revised figures for Arkansas’ unemployment rate show a slightly different pattern than did the previously-published data.  As shown in the figure below, the revised data show that the unemployment rate was higher than previously published from mid-2010 through mid-2011.  On the other hand, the unemployment-rate surge that we saw in the latter part of 2011 has been largely revised away.  For the month of December 2011, the new data show the rate at 7.8% — slightly higher than the 7.7% that was previously reported.

Source: Bureau of Labor Statistics

Metro Area Unemployment Rates

During 2011, the BLS began publishing smoothed seasonally-adjusted metropolitan area estimates for labor force and unemployment data.  The smoothed seasonally adjusted (SSA) estimates are processed using an algorithm that incorporates a long-run trend smoothing procedure.  Hence, the estimates show less month-to-month variability than data that is subjected to more conventional seasonal-adjustment techniques.  Beginning with the next Metropolitan Area Employment and Unemployment news release, the Arkansas Economist will begin publishing these estimates instead of the figures calculated in-house by the Institute for Economic Advancement.

Comparing the chart below to the most recent analysis of metro area unemployment rates, the overall pattern of unemployment-rate movements is basically the same but with somewhat lower volatility.  Because the smoothing procedure reduces the magnitude of month-to-month changes, the SSA data ended the year showing higher unemployment-rate levels than a simple seasonal adjustment technique. (That is, some of the rapid decline in unemployment rates that occurred in the last three months of the year is treated as transitory by the smoothing algorithm.)  The SSA data make for less dramatic headlines — rather, they provide a more measured evaluation of changes in metro area unemployment rates over time.

Source: Bureau of Labor Statistics

 

 

Metro Unemployment Rates End 2011 Sharply Lower

Unemployment rates in Arkansas Metropolitan Statistical Areas (MSAs) declined in December — the third consecutive month of across-the-board reductions in jobless rates (seasonally-adjusted).  Previously-released statewide data showed that the Arkansas unemployment rate fell from 8.3 percent in September to 7.7 percent in December.  Rates in Arkansas metro areas showed even sharper declines over the three-month period–ranging from 0.7 percentage points in Hot Springs to 1.7 percent in the Memphis MSA.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

As shown in the table below, the raw data from the Bureau of Labor Statistics showed unemployment rates rising from November to December.  However, these increases were entirely seasonal in nature.  After seasonal adjustment, the monthly change in unemployment rates was negative for every MSA except Texarkana, where the rate was unchanged at 7.1%.  The end-of-year declines in unemployment bring Arkansas metro areas back into the set of MSAs with unemployment rates lower than a year earlier.  According to the BLS press release this morning, 329 of the nation’s 372 metro areas fell into this category in December.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Independent data on nonfarm payroll employment was not as unambiguously positive as the household unemployment data.  Employment was up in 5 MSAs, but declined in Hot Springs, Jonesboro and Fort Smith.  Since statewide employment reached a low-point in February 2010, most of the state’s MSAs have seen positive employment growth.  However, Fort Smith and Pine Bluff have continued to experience job losses.  Compared to the start of the recession in December 2007, only Hot Springs has seen net positive job growth.

Source: Bureau of Labor Statistics

December Unemployment Rate Drops to 7.7%

The Arkansas unemployment rate declined to 7.7% in December, down from a revised 7.9% rate in November.   Over the last two months of the year, the number of unemployed declined by 6,469 and the number employed rose by 16,190.  Accordingly, the sharp drop in the unemployment rate has taken place in the context of an expanding labor force.  Since Spring of 2011, we had seen the labor force participation rate decline sharply as the unemployment rate rose.  In the final months of year we’ve seen that trend almost completely reversed and we’re now right about where we were before the summer doldrums hit the Arkansas employment market.

Source: Bureau of Labor Statistics

The improvement in unemployment indicated by the household survey suggests that the temporary weakness we saw during 2011 has abated.  But there is still reason to be cautious about the outlook for 2012.  In the independent payroll survey released as part of today’s report, total employment for the month declined slightly from the previous month (-500, seasonally adjusted).  Moreover, the employment total for November was revised down by 1,600.  For the two months together, payroll employment was up by 5,000.  However, total employment remains below a peak reached in April 2011.

Source: Bureau of Labor Statistics

The December decline in payroll employment was spread across service-providing sectors.  One notable exception was Trade, Transportation and Utilities, which showed an increase of 1,900 jobs for the month.  Nevertheless, TT&U employment remains 4,800 jobs below the April 2011 peak.  Other sectors that continue to lag well below their levels of last spring include Manufacturing and Professional & Business Services.

Source: Bureau of Labor Statistics

Compared to a year ago (December 2010), total payroll employment is up by 8,000.   However, the next monthly report (Scheduled for March 13), will include annual benchark revisions to the payroll data.  As discussed in a previous post, the data revisions are likely to result in a sharp downward revision to the payroll figures for early 2011.  As a result, we are likely to see the year-over-year employment gains revised away in light of updated, more accurate data.

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*Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, are available hereTable – Seasonally Adjusted NFPE.

Metro Area Unemployment Rates Down in November

Unemployment rates in Arkansas metro areas fell sharply in November, adding to declines registered in October.  The newest data, released this morning by the Bureau of Labor Statistics, show unemployment rates down in each of the Metropolitan Statistical Areas (MSAs) that include parts of Arkansas. The raw data (which are not seasonally adjusted) generally understate the magnitude of the declines. After seasonal adjustment, the declines in November ranged from -0.2% in Fort Smith to  -0.9% in Memphis.  For the two months of October and November, unemployment rates were down by at least one-half of a percentage point in all eight MSAs.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

After experiencing rising unemployment rates over the first half of 2011, the recent declines leave unemployment lower than the previous year in every MSA except Pine Bluff, where the unemployment rate was unchanged from November 2010.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Arkansas Employment and Unemployment – November 2011

The unemployment rate in Arkansas fell by two-tenths of a percent to 8.0% November.  According to data from the Bureau of Labor Statistics (BLS) and the Department of Workforce Services (DWS), the number of unemployed Arkansans declined by 3,219.  The household survey also showed an increase of nearly 10,000 employed, so the unemployment rate declined in the context of a sharp increase in the labor force.

Source: Bureau of Labor Statistics

The independent payroll survey also showed a significant increase in employment.  Total nonfarm payrolls increased by 7,100 for the month, a gain of 0.6% (seasonally adjusted*).  According to the press release from the BLS, this was the second-largest over-the-month percentage increase in the nation (employment in South Carolina increased by 0.9%).  As shown in the table below, gains were prominent in service-providing sectors — particularly Professional & Business Services (+2,500) and Education & Health Services (+2,000).  Gains in Retail Trade employment also boosted the Trade, Transportation & Utilities category, which increased by 1,100 jobs.  The November data also showed a sharp increase in Manufacturing employment (+1,400). 

Source: Bureau of Labor Statistics

Since peaking in April 2011, employment in Arkansas had been on the decline for much of the year.  The November increase (on top of a revised 1,200 job gain in October) represents a welcome reversal of that trend.  On net, however, employment remains 1,200 below the April peak.  Compared to the trough registered in February 2010, employment in Arkansas has increased by 29,400.  Nevertheless, the total number of jobs remains 29,100 below the level recorded at the start of the recession in December 2007. 

Source: Bureau of Labor Statistics

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*Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, are available hereTable – Seasonally Adjusted NFPE.

Arkansas Employment and Unemployment – October 2011

The unemployment rate in Arkansas dropped one tenth of a percentage point to 8.2 percent in October.  According to data from the Bureau of Labor Statistics (BLS) and the Department of Workforce Services (DWS), the number of unemployed Arkansans fell by 663 (seasonally adjusted), the first monthly decline since May.  The data from the household survey also showed that the number of employed rose by 7,424.  Arkansas was one of  36 states to see a drop in the unemployment rate in October, but one of only 8 states with an unemployment rate higher than one year earlier.

Source:  Bureau of Labor Statistics
Source: Bureau of Labor Statistics

The separate payroll employment report showed an increase of 1,000 jobs for the month (seasonally adjusted).  However, total employment in October was down 1,300 from a year earlier, and 8,500 below the recent peak employment recorded in April 2011.  Month-to-month changes showed declines in good-producing sectors, with Construction down by 500 and Manufacturing down by 1,500.  Employment in Trade, Transportation and Utilities was also down sharply.  With the exception of Information Services, all service-sector categories showed increases in October.  As noted in the news release from DWS, not-seasonally-adjusted data for Education and Health Services and Local Government showed increases associated with back-to-school effects.  Nevertheless, these categories also experienced employment increases after accounting for this recurring seasonal pattern.

Source:  Bureau of Labor Statistics
Source: Bureau of Labor Statistics

As previously reported on the Arkansas Economist, the payroll data are subject to annual benchmark revisions that will be completed in March 2012.  Based on available data from the Quarterly Census of Employment and Wages (QCEW), the benchmark revisions are likely to show sharply lower job growth for the fourth quarter of 2010 and the first quarter of 2011.  Consequently, the total level of employment for all subsequent months (including October) are likely to be revised downward by about 10,000 jobs (+/- 2,000).

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*Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, are available hereTable – Seasonally Adjusted NFPE.