The national and state unemployment reports for April had shown a distinctive combination of statistics:  relatively large declines in unemployment rates, accompanied by sharp drop-offs in labor force participation.  Data for Arkansas metro areas released this morning show the same pattern.

Compared to a year ago, unemployment rates have dropped significantly.  The not-seasonally adjusted data in the table below show declines ranging from 0.8% in Fayetteville and Little Rock to 1.9% in Memphis.  According to this morning’s news release, Arkansas’ metro areas were among the 357 of 372 metro areas nationwide that experienced declining unemployment rates over the past 12 months.

Source: Bureau of Labor Statistics, Local Area Employment Statistics (LAUS)

As was true for the state and national data, monthly changes in the unemployment rate were uncharacteristically large.  According to the smoothed seasonally adjusted data shown below, unemployment rates dropped by as much as 0.4% in Memphis and Pine Bluff.

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

But the April declines in unemployment rates are not unambiguously positive news.  As was the case with the state and national data, the changes in metro area unemployment rates were driven by declining labor force participation.  The smoothed-seasonally adjusted data show labor force declines in April ranged from 0.3% in Memphis to 0.8% in Fort Smith.  The concern is that the unemployment rate is not falling because more unemployed are finding jobs, but because more unemployed are becoming discouraged and leaving the labor force (or the state).

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

Payroll Employment
The data from the separate survey of employers does little to assuage concerns about the employment statistics from the household survey.  Monthly changes in nonfarm payrolls were mixed around the state:  employment declined in Fort Smith, Memphis and Pine Bluff, but increased in the state’s other metro areas.  Nevertheless, year-over-year gains have generally been modest.  Jonesboro and Fayetteville have seen sizable gains in employment over the past 12 months, but gains in the state’s other metro areas have been relatively small.  Employment in Pine Bluff continues to decline.  Compared to pre-recession employment levels, only Fayetteville and Jonesboro have surpassed previous peaks.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

The April employment statistics represent just one monthly observation.  Recent employment reports have painted a picture of improving labor market conditions–with unemployment falling and labor force participation rising.  The April data broke from these patterns, but it is too soon to say whether this represents a weakening of previous trends or simply a one-month anomaly.