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Metro Area Unemployment – 2011:Q1

The latest unemployment rate figures for Arkansas metro areas provide another example of the importance of considering seasonal patterns when analyzing month-to-month data.  The raw, not-seasonally adjusted data released yesterday by the Bureau of Labor Statistics show unemployment rates declining between February and March for each of Arkansas’ metropolitan statistical areas (MSAs).  However, it is typical for March that unemployment rates decline:  Economic activity generally begins a seasonal resurgence in the spring, so unemployment rates tend to decline.  If we seek to look beyond routine seasonal changes in the data to discern longer term trends and changes associated with the business cycle, it is helpful to consider seasonally adjusted figures.

As shown in the table below, the not-seasonally adjusted unemployment rate for Arkansas fell from 8.7% in January to 8.4% in Feburary, then to 8.0% in March.  Yet, the seasonally adjusted figures show that the unemployment rate was steady at 7.8% for those three months.  The decline from January to March was entirely seasonal in character, indicating nothing to suggest that the economic recovery was resulting in lower unemployment.  Similarly, the not-seasonally adjusted data for Arkansas’ MSAs show declining unemployment rates across the board.  But to what extent were those changes purely seasonal?

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement
Sources: Bureau of Labor Statistics, Institute for Economic Advancement

The seasonally adjusted data show that a portion of the lower unemployment in February represented a true decline.  The data show that unemployment rates declined in five MSAs, remaining unchanged or rising in the other two.  In March, however, seasonal factors were more important.  The not seasonally adjusted data show lower unemployment rates for all seven MSAs while the seasonally adjusted figures show higher unemployment in all seven.   So, why did unadjusted unemployment rates decline in March?  Because it was March.

 Beyond the month-to-month uncertainty associated with seasonal factors, metro area data are also more variable than the state-level or national data.  Hence, it is even more important to view MSA data from a longer term perspective.  With this consideration in mind, the figure below shows quarterly average unemployment rates for Arkansas MSAs.  Rates declined slightly in the spring of 2010, but then rose during the second half of the year (partly as a result of temporary Census workers being idled).  In nearly all of Arkansas’ MSAs, unemployment appears to have peaked in the fourth quarter of 2010 and declined in the first quarter of this year.  By way of comparison, the seasonally-adjusted unemployment rate for the state as a whole was 7.9% in 2010:Q4 and 7.8% in 2011:Q1.

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement
Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Arkansas Employment and Unemployment – March 2011

Arkansas’ unemployment rate remained unchanged at 7.8% in March (seasonally adjusted).  The latest data from the Bureau of Labor Statistics and Arkansas Department of Workforce Services show that the number of unemployed rose slightly, but the number of employed rose by nearly 4,400.  The change in March represents the eighth consecutive month of increases.

The household survey and the establishment survey can sometimes provide conflicting signals.  However, the two surveys have recently been presenting a consistent picture of the Arkansas employment market.  As shown in the figure below, both measures have generally  been rising since the beginning of 2010.  The household survey shows employment up by over 21,000 since December of 2009.  Meanwhile the payroll survey shows employment up by about 24,600 since that series hit a trough in February 2010.

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

The latest reading on nonfarm payroll employment shows the number of jobs up by approximately 3,200 in March (seasonally adjusted).   Monthly losses were recorded in several service-providing sectors, including two of the areas that have shown the most strength during the recovery, Education and Health Services, and Business and Professional Services.  Construction and Manufacturing both showed increases for the month, but employment in these goods-producing sectors is down from a year ago.  Total government employment is also down from a year ago, with lower Federal government employment relfecting (in part) the temporarily high Census Bureau employment of spring 2010.

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

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

Arkansas Employment and Unemployment – February 2011

Arkansas’ unemployment rate remained unchanged at 7.8% in February (seasonally adjusted).  The latest data from the Bureau of Labor Statistics and Arkansas Department of Workforce Services show that the number of unemployed dropped for a second consecutive month, down by 768.  The survey of households also showed that the number of employed increased by 3821 in February, and was up by nearly 16,000 from a year earlier.

Data from the payroll survey showed similar gains in February, with the number of jobs up by 2,000 for the month.  The gains were exclusively in the service-providing sectors.  Goods producing sectors showed a total decline of 2,900 jobs for the month.   Large increases were recorded for Professional and Business Services (up 2,800) and Trade, Transportation, and Utilities (up 1,600).

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

A similar pattern can be seen in employment growth since February of last year.  Total employment increased by nearly 23,000 jobs.  Employment in the goods-producing sectors declined by about 3,500 jobs, with service-providing sectors adding 26,400 jobs.

Currently-available data suggest that February 2010 marked a low point in the employment series for both the U.S. and Arkansas (see chart below).   The increase in Arkansas employment over the past 12 months represents a recovery of about 39 of the job losses recorded from the start of the recession (December 2007) through February 2010.

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement
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 press release from the Arkansas Department of Workforce Services, are available here
Table – Seasonally Adjusted NFPE

Metro Area Employment and Unemployment

The latest report on metro area employment and unemployment shows that  job growth is picking up across most of the state, but Fort Smith and Pine Bluff appear to be lagging behind.   This morning’s release from the Bureau of Labor Statistics includes new and revised data that show an improved outlook for central and northwest Arkansas in particular.

From December 2010 to January 2011, payroll employment declined by 0.5% in Fort Smith and by 1.1% in Pine Bluff.  These two metro areas also showed year-over-year declines, and remain at employment levels far below those at the start of the national recession (in December 2007).  The state’s other metro areas have shown varying degrees of progress toward recovering from job losses experienced during the recession.  Jonesboro continues to lead with employment 0.4% higher than in December 2007.

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

These new employment figures include the annual “benchmark revisions,” in which past data are updated to incorporate information from more detailed sources.  The revised data show that employment growth during 2010 was stronger than we realized at the time — particularly in the state’s two largest metro areas.  In previously-reported data, both the Fayetteville-Springdale-Rogers MSA and Little Rock-North Little Rock-Conway MSA showed net job losses during 2010.  The revised data show robust growth rates of over 3% in both metro areas.  The revised data shows that much of this job growth ocurred in the first half of 2010, with slower gains during the second half.

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

The higher employment growth in Little Rock and Fayetteville are consistent with the pattern of unemployment rates across the state.  Fayetteville has the lowest unemployment rate in the state — 6.2% in January (seasonally adjusted).  The unemployment rate in Little Rock has fallen below 7% to approximately 6.8% in January.  Pine Bluff continues to show the highest rate of unemployment, at 9.5%.  Unemployment in the state’s other metro areas range from 7.2% in Texarkana to 8.2% in Fort Smith.  The most recent data show that unemployment rates declined in all of the states MSAs in January, with rates down substantially since late summer and early autumn.

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement
Sources: Bureau of Labor Statistics, Institute for Economic Advancement

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*Seasonally adjusted data for MSA Payroll Employment are available from the Bureau of Labor Statistics.  However, data for unemployment rates are not.  In order to facilitate comparisons over different months of the year, unemployment rates are seasonally adjusted by the Institute for Economic Advancement using the conventional Census-X12 ARIMA procedure.

Arkansas Employment and Unemployment – January 2011

The latest data on Arkansas employment and unemployment came out this morning.  Today’s release includes new data for January 2011, along with updated and revised data for previous years.

The houshold survey showed a decline in the unemployment rate from 7.9% in December to 7.8% in January.  More important, the components of the overall rate support an optimistic view:  the total number of employed increased by nearly 1,700 and the number of unemployed declined by nearly 300.  The resulting increase in the size of the labor force contributes to an ongoing trend:  since July of last year, the Arkansas labor force has increased by more than 12,000, with the unemployment rate remaining fairly stable.

The unemployment figures released this morning incorporate recent revisions to the statistical methodology used to construct the monthly estimates.  As shown in the figure below, these revisions had the effect of increasing the unemployment rate throughout much of 2009 and 2010.  That is, the unemployment rate over the past two years has been running somewhat higher than the data were leading us to believe at the time.  Most notably, the new data show that unemployment hit 8% for a brief period in early 2010.  Since then, the rate has remained in the 7.8% to 8.0% range.

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

The payroll survey showed employment gains in most service-providing sectors, but indicated weakness in goods-producing sectors.  Overall, nonfarm payroll employment was up by 1,200 in January (seasonally adjusted).  Compared to January 2010, payrolls were up by approximately 17,000.  The monthly figures showed small declines in both construction (-500) and manufacturing (-700).  Service providing sectors, on the other hand, added 2,200 jobs.  The only non-government service sector to show a monthly decline was Leisure and Hospitality (-1,900).  However, the Leisure and Hospitality sector had been showing strength in the latter part of 2010, with employment up by 4,000 over the past year. 

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

The payroll employment data were also subject to annual revisions.   Last year, the revised data revealed a sharply larger rate of job-losses in 2009 than previously-published data had been suggesting.  This year, totals for 2009 and 2010 were not revised substantially, but there were some changes to specific sectors that are notable.   The previously-published data had shown sizable increases in construction and manufacturing employment in 2010.  The revised data show a decline in construction jobs in 2010 and only a small increase in manufacturing employment.  On the other side of the ledger, Trade, Transportation, & Utilities had been showing a net decline for 2010, but the revised data show a fairly strong gain for the year.  The revised data also show larger gains for Professional & Business Services and Leisure & Hospitality Services.  Employment growth in Education & Health Services has evidently been weaker than the original data were suggesting; however, that sector has continued to show positive growth throughout the recession and recovery.

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

*A note on seaonally adjusted data:  With holiday shopping and travel subsiding and winter weather moving in, it is typical to see large employment declines in the payroll data for January.  Therefore, it is not surprising that not-seasonally adjusted data for January 2011 show a decline of 19,900 jobs (as reported in the monthly press release from the Arkansas Department of Workforce Services) .  The data presented here at the Arkansas Economist are adjusted by the Bureau of Labor Statistics to account for typical, recurring seasonal patterns.  Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the DWS press release, are available hereTable – Seasonally Adjusted NFPE 

Metro Area Employment and Unemployment – December 2010

End-of-year statistics for employment and unemployment in in metropolitan areas were released this morning by the Bureau of Labor Statistics.  Unemployment rates (seasonally adjusted*) declined slightly in most of Arkansas’ MSAs in December, but rose in Fort Smith.  As shown in the chart below,  The lower unemployment rates we saw during the summer were transitory — evidently associated with of temporary Census employment.  Rates generally ended the year slightly higher than they were in January, rising by 0.3 to 0.5 percentage points in most of the state’s metro areas.  Fort Smith showed an end-of-year increase that took its unemployment rate to 8.6%, up by 0.7  percentage points from January.   Only Texarkana’s unemployment rate declined over the course of the year, falling slightly to 7.3 percent in December. 

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

Employment statistics from the payroll survey showed employment increases in all of Arkansas’ metro areas in December.  Hot Springs, Jonesboro and Pine Bluff showed significant increases.  For the year as a whole, employment was up in three MSAs:  Hot Springs, Texarkana and Jonesboro.  In fact, employment in Jonesboro remains higher now than it was at the start of the recession in December 2007.  At the other extreme, employment in Fort Smith is now down 8% from the start of the recession. 

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

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*Seasonally adjusted data for MSA Payroll Employment are available from the Bureau of Labor Statistics.  However, data for unemployment rates are not.  In order to facilitate comparisons over different months of the year, unemployment rates are seasonally adjusted by the Institute for Economic Advancement using the conventional Census-X12 ARIMA procedure.

Arkansas Employment and Unemployment – November 2010

Data on employment and unemployment were released this morning by the U.S. Bureau of Labor Statistics and Arkansas Department of Workforce Services.   The headline news is that the unemployment rate increased by yet another 0.1 percent to 7.9 percent.   The number of unemployed workers rose by 1,678  and the number of employed increased by 4,671.  Hence the labor force expanded by 6,309.   The labor force has been expanding quite rapidly since September, suggesting that unemployed workers who had previously been dropped from the statistics as “discouraged workers” are now returning to the labor market.  This tends to result in higher measured unemployment rates, even as employment is expanding.

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

After a substantial increase in October, the report for November shows that nonfarm payroll employment continued to rise, albeit at a slower pace.  Revised figures for October show an increase of 14,100 jobs rather than 17,400 as originally reported.  On net, total payroll employment rose by another 100 jobs from October to November.  

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

Seasonally adjusted increases were reported for Manufacturing; Trade, Transportation and Utilities; and Education and Health Services.  Together, these three super-sectors account for nearly half of the state’s total employment.  Seeing job growth in these sectors is particularly encouraging.  Gains were also recorded in Mining and Logging; Information Services; Other Services; and Government.  Over the past 12 months, approximately 11,000 jobs have been added to the Arkansas economy.

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

Metro Area Employment and Unemployment – October 2010

This morning, the Bureau of Labor Statistics released the latest information (for October) on employment and unemployment in Metropolitan Statical Areas (MSAs) around the nation.  The report suggests that labor markets in Arkansas’ metro areas are slowly improving.

Household Suvey:
Unemployment in three of Arkansas’ MSAs  fell in October (seasonally adjusted data*).  Rates in both Hot Springs and Texarkana were down 0.1% while Pine Bluff fell 0.3%.   Rates in Fort Smith and Little Rock were unchanged.  Only two MSAs saw higher unemployment:  Rates in Fayetteville and Jonesboro both rose by 0.2%.

Sources:  Bureau of Labor Statisics, UALR Institute for Economic Advancement
Sources: Bureau of Labor Statisics, UALR Institute for Economic Advancement

It might appear that unemployment rates around the state are following a rising trend.  But if we take a step back and look at the pattern that rates have followed over the course of 2010 it looks more like a mini-double dip employment recession.

Sources:  Bureau of Labor Statistics, UALR Institute for Economic Advancement
Sources: Bureau of Labor Statistics, UALR Institute for Economic Advancement

In actuality, the patterns in the data are related to the hiring and subsequent layoffs of temporary Census workers.   Arkansas’ MSA’s have followed the same pattern seen in statewide and national data:  rates falling from around April until July, then rising until September or October, leaving unemployment rates about where they were in April.  This matches the timing of the surge in the employment of temporary Census workers.  Netting out this effect, unemployment has been approximately flat for most of 2010.

Payroll Survey:
Changes in nonfarm payroll employment provide encouraging signs:  October employment growth was zero or positive in each of the state’s MSAs.  This is not surprising, given the state-level data showing that Arkansas’ employment growth was the fastest in the nation in October.  Since the end of 2009, payroll growth has been positive in three of the seven MSAs.  Relative to a last October, growth has been positive in four MSAs.

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

In terms of recovering the jobs that were lost during the recession, the figure below shows the cumulative change in employment since the start of the recession (December 2007).  Employment in the MSA’s of Hot Springs, Jonesboro, Texarkana — and more recently, Pine Bluff — have begun to increase from their low points earlier in year.  In fact, Jonesboro has experienced positive net employment growth since the start of the recession.  The other metro areas have a long way to go.

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

Although the effects of temporary Census workers have distorted the statistics, unemployment rates appears to be stabilizing.  And payroll employment figures are showing signs of real improvement (particularly in some areas of the state).  Employment statistics are lagging indicators (especially the unemployment rate), so even though we are nearly 1 – 1/2  years into the recovery it is likely to take considerably more time before the employment situation returns to a healthy state.

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*Seasonally adjusted data for MSA Payroll Employment are available from the Bureau of Labor Statistics.  However, data for unemployment rates are not.  In order to facilitate comparisons over different months of the year, unemployment rates are seasonally adjusted by the Institute for Economic Advancement using the conventional Census-X12 ARIMA procedure.

Arkansas Employment and Unemployment – October 2010

Today’s employment reports from the U.S. Bureau of Labor Statistics and Arkansas Department of Workforce Services included both good news and bad news.  The bad news was another uptick in the unemployment rate, up to 7.8% from 7.7% in September.    The household survey that underlies the unemployment report indicated an increase of over 2,000 newly unemployed in October.

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

The survey of employers, on the other hand, showed a sharp increase in employment in October, following very disappointing jobs numbers from the previous two months.  After declining by 11,100 in August and 5,000 in September, October employment was up by 17,400 thousand jobs (seasonally adjusted).  In percentage terms this was the largest increase among the 50 states (+1.5%).

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

The job gains were particularly notable in service providing sectors.  Professional and Business Services were up by 5,900 jobs, Leisure and Hospitality was up by 4,800, and Educational and Health Services were up by 1,700.  Since December of 2009, total employment in Arkansas has risen by nearly 19 thousand.  This represents considerable progress toward recovering the 49 thousand jobs that were lost over the previous two years. 

For the remainder of this year and through next year, employment growth should continue steadily, but somewhat slowly.  The unemployment rate, which tends to be a lagging indicator, may climb a bit higher before declining in the second half of 2011.

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

Arkansas Employment and Unemployment – September 2010

This morning’s employment report from the U.S. Bureau of Labor Statistics and the Arkansas Department of Workforce Services showed that the labor market weakness recently evident in the national economic statistics is affecting Arkansas as well.   The new report showed that the number of unemployed Arkansans increased by nearly 1,900 in September.   As a result, the unemployment rate rose by two-tenths of one percent to 7.7%.  

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

Once again this month, it is important to consider seasonal patterns when evaluating the data on payroll employment.  Without seasonal adjustment, the number of jobs counted in the payroll survey rose by more than 10,000.  However, as shown in the chart below, September is typically a month where employment expands sharply.   After adjusting for this recurring seasonal pattern, employment declined by 4,900.  When it comes to evaluating month-to-month job growth, the seasonally-adjusted data provide a more meaningful basis for comparison.  In fact, the inconsistency between comparing seasonally-adjusted household unemployment with not-seasonally-adjusted payroll employment is particularly evident in the data for September.

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

Some of the job losses over the past two months have been attributable to the lay-off of temporary Census workers.  As shown in the table below, Government employment declined by 2,400 in September.   Other important sectors showing job losses in September include Trade, Transportation, and Utilities; Construction; and Manufacturing.   Growth in manufacturing employment earlier in the year had been an encouraging sign.  But after six consecutive months of increase, employment in manufacturing has now declined in both August (-1,200) and September (-1,300).

Employment in service-providing sectors fared somewhat better in September.  Professional and Business services, Leisure and Hospitality Services, and Other Services showed seasonally-adjusted increases in September.  The Leisure and Hospitality category is another example where seasonal adjustment matters.  Typically, firms in this sector scale back after Labor Day.  Consequently, not-seasonally-adjusted employment in this sector actually declined by 1,200 jobs.  But this is a smaller decline that would usually be expected for the month.  Hence, after seasonal adjustment, employment rose by 300.

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

Sluggish job growth has been distinct characteristic of the current economic recovery–both in Arkansas and nationwide.  Recent data show increasing weakness in job growth.  Two factors are relevant:  First, the inventory correction that helped to boost production-related jobs earlier in the year appears to have largely run its course.  In addition, the direct effects of Federal stimulus programs have dissipated somewhat.  We are now in a period in which the economy is transitioning toward a lasting, self-sustaining recovery.  Employment growth is sure to pick up when these transitions are complete.  The key question is how long they will take.

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