This morning, the Bureau of Labor Statistics (BLS) released new information on unemployment and employment in metropolitan areas. The BLS News Release reported that unemployment rates were down from a year earlier in 322 of the nations 372 metropolitan areas. All eight of Arkansas’ metro areas were included in that total, with the year-over-year declines ranging from 0.9% in Fayetteville to 1.8% in Pine Bluff.
The not-seasonally adjusted data show that the unemployment fell rather sharply from July to August, but that is a typical seasonal effect. (For example, over the past 10 years, the not-seasonally adjusted unemployment rate for Arkansas has, on average fallen by 0.57% between July and August, while the seasonally adjusted average was +0.03% for the same monthly change.) Data from the Smoothed Seasonally Adjusted Metropolitan Area Estimates show that there was little change in metro-area unemployment rates after taking account of the usual seasonal swing: Unemployment rates declined by one-tenth of a percentage point in Fort Smith and Pine Bluff, increased by one-tenth in Memphis, and were unchanged in the remaining metro areas.
Over the past several months, we have noted a sharp decline in labor force participation in Arkansas. In the report on statewide unemployment in August, we saw a slowdown of that trend. As shown in the figure below, most of the state’s metro areas have shown a similar downward trend in the size of their labor forces since March 2014. The weakening of the downward trend is also evident in most of the state’s metro areas (with the notable exception of Memphis).
There is no clear explanation of why we have seen such a sharp downward trend since spring. One pattern that appears to generally hold in the figure below is the relationship between cumulative labor force contractions and the more recent weakening of the downward trend. In particular, the metro areas that have experienced the largest cumulative reductions in labor force participation during 2013 and 2014 continue to trend downward. The weakening of the downward trend is more apparent in metro areas that have only recently been subject to a declining labor force. In fact, the labor force in Jonesboro — where cumulative increases over the past two years have been the largest — edged slightly higher in August.
Statewide payroll employment growth was essentially zero in August, with metropolitan areas showing a wide range of changes. From July to August, employment was down in four metro areas (Little Rock, Memphis, Pine Bluff and Jonesboro) and was up in the remaining four (Fayetteville, Texarkana, Fort Smith and Hot Springs). Over the past year, only Pine Bluff has seen a net reduction in payroll employment (-1.4%), with increases in other metro areas ranging from +0.5% in Fort Smith to +1.9% in Jonesboro. Compared to pre-recession employment levels, only Jonesboro and Fayetteville have seen net increases.