The latest report on metropolitan area employment shows ongoing improvement in Arkansas’ metro areas, with some recovering from the COVID-19 recession more rapidly than others. Five of the eight metro areas covering parts of Arkansas saw the unemployment rate decline by 0.1 percentage point in August, matching the statewide change. In Pine Bluff, the unemployment rate declined by 0.3 percentage points, while in Hot Springs the rate dropped by 0.8 percentage points. In Northwest Arkansas the unemployment rate was unchanged at 2.7%—the lowest reading in the state.
Over the past 12 months, changes in unemployment rates largely reflect reversal of the sharp increases that occurred in March and April of 2020. Hot Springs and Memphis, the two metro areas where unemployment rates have fallen by over 4 percentage points over the past year, experienced particularly high unemployment rates in April 2020, peaking at 15.6% and 13.4%, respectively. Texarkana spiked at 13.8% unemployment last April, but recovered fairly quickly between April and August 2020, experiencing a relatively smaller net change over the past 12 months.
Relative the pre-pandemic conditions, the recovery in Fort Smith has been significant: The August unemployment rate of 3.6% was the second-lowest in the state, and is 0.1 percentage point lower than it was in February 2020. Unemployment in Memphis and Texarkana remains elevated, but the unemployment rates in Fayetteville, Hot Springs, Jonesboro, Little Rock and Pine Bluff are all less than one percentage point higher than at the last business cycle peak.
Nonfarm payroll employment increased in five of Arkansas’ metro areas in August, with the largest increase in Northwest Arkansas (+0.6%). Employment in Hot Springs and Texarkana was down for the month, with Little Rock unchanged.
After the August increase, employment in the Fayetteville MSA represented a net gain of 2.1% relative to February 2020. Employment in all other metro areas remains below pre-pandemic levels with the net declines having narrowed to between 1% and 2% in Fort Smith, Jonesboro, Memphis and Pine Bluff. In the remaining metro areas—Hot Springs, Little Rock and Texarkana—employment remains more than 3% lower than in February 2020.
Taking the latest data at face value, it is clear that the Fayetteville metro area—which was growing at the fastest rate before the pandemic—has experienced the most robust recovery among Arkansas’ metro areas. Fort Smith has also shown significant improvement, with the second-lowest unemployment rate and the second-best net employment change since February 2020. Indicators from the household survey and the payroll survey give mixed signals regarding other metro areas, but Texarkana stands out as one of the three highest unemployment rates and one of the three largest net employment declines since the onset of the COVID-19 recession.