A forum for information and analysis on the Arkansas economy

Metro and County Employment & Unemployment – December 2020

The BLS report on employment and unemployment in counties and metropolitan areas for December was released this morning.  For Arkansas, the data showed that the changes reported in the remarkable state-wide report for December were widely reflected in local statistics across the state.

To review: When the state-level employment report was released two weeks ago, the most notable (incredible?) news was the decline in the unemployment rate from 6.3% to 4.2%.  Underlying the drop was a surge in the number of employed (up 5.6% from the previous month) and a sharp reduction in the number of unemployed (down 31.8% from November).  Taken at face value, this drop suggests that nearly one in three of those unemployed in November found employment in December (at least statistically speaking—gross labor market flows are more complex).  These figures are gleaned from the BLS’s Household Survey (a.k.a., the Current Population Survey), which is always subject to a wide range of uncertainty and which has been plagued by and problems during the pandemic.  Meanwhile, the nonfarm payroll statistics, generated from the Establishment Survey (officially known as the Current Economic Statistics survey), showed a significant  increase in total statewide employment in December—but nowhere near the magnitude of the increase reported in the Household Survey.

Metro Payroll Employment
Beginning with the metropolitan area report on nonfarm payroll employment:  The December report showed total employment up in five metros, down in two, and unchanged in Hot Springs.  In percentage terms, gains in Fayetteville, Little Rock, Memphis and Texarkana were greater than or equal to the statewide rate of increase.

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

Compared a December 2019, most metro areas showed employment declines in December 2020.  The exception was Jonesboro, which showed a 1.3% gain for the year.  Hot Springs has shown a remarkable rebound after experiencing the sharpest decline of any Arkansas metro area during March and April.  Compared to a year earlier, Hot Springs employment is down only 0.8%.  Among the other metros showing year-over-year declines, Fort Smith, Little Rock, Memphis and Pine Bluff registered larger percentage declines than the statewide average of -2.8%.

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

Metro Unemployment
On the Household Survey side of the report, sharp declines were registered for each metro area except Memphis. Unemployment rates in Fayetteville and Jonesboro dropped below 4% and Little Rock’s rate declined to 4.5%.

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

The largest decline in unemployment among metro areas was in Pine Bluff (-2.8 percentage points) and the smallest decline (excluding Memphis) was in Texarkana (-1.8 percentage points).  Compared to December 2019, unemployment rates are higher in all Metro areas, with the net changes ranging from +0.6 percentage points in Pine Bluff to up 3.5 percentage points in Memphis.

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

Comparing the numbers from the Household Survey (HH) and the Payroll Survey (NFPE), the first two columns of the table below compare percentage changes for employment from November to December, with obvious differences between the two. Memphis is a particular outlier for both measures,

The third column of the table shows the percentage changes in the number of unemployed from November to December.  The extreme drops in the number of unemployed are shared across most metro areas, with the exception of Memphis and Texarkana.

Source: Bureau of Labor Statistics and author’s calculations

The common patterns for most metropolitan areas within Arkansas—and the differences displayed by those with significant geographical regions outside of the state of Arkansas—leads one to suspect that the process of allocating estimated statewide changes to local areas might be important for interpreting the metro (and county) data.

County Unemployment Rates
There are no payroll employment statistics available on the county level, but the county statistics on unemployment broadly mirror the statewide data.  Each of Arkansas’ 75 counties registered unemployment rate declines, with changes ranging from -2.8 percentage points in Chicot and Mississippi Counties to -1.0 percentage points in Newton, Scott, and Yell Counties.  There is a notable negative relationship between the November-December changes in unemployment rates and the level of unemployment in November, with a correlation of -88%.  That is, counties with relatively high unemployment rates registered relatively large declines.

With the November-December declines taken into account, differences in unemployment rates around the state have therefore narrowed.  As illustrated in the interactive map below, nearly half of Arkansas’ counties registered unemployment rates below 4.0%, with the lowest in the state being Madison County at 2.8%.  At the upper end of the range, Chicot County retained the dubious distinction of having the highest unemployment rate in the state, but as noted above, a drop of 2.8 percentage points lowered the Chicot County’s unemployment rate to 8.4%.

In terms of the changes in the numbers of employed and unemployed, the county-level data closely correspond to the statewide totals.  The number of unemployed declined in all 75 counties, with changes ranging from -14.8% in Columbia County to -32.7% in Crittenden County.  The median change among the counties was -27.8%.  Similarly, increases in the number of employed were in a relatively tight range:  From +5.1% in Crittenden County to +2.8% in Montgomery County.  The median was +4.1%.

Overall, the statistics for Arkansas’ metro areas conform to the statewide totals released two weeks ago.  Given the current situation, measurement of key economic indicators is subject to wider-than-usual ranges of uncertainty.  That seems to be particularly true for the data associated with the Household Survey.  While the magnitudes of changes in employment and unemployment near the end of 2020 are subject to likely revisions, the overall takeaway from the December employment reports—state, metro, and county—is that labor market conditions improved in Arkansas toward the end of the year, albeit perhaps not as significantly as these initial statistics suggest.

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Metro and County Employment & Unemployment – December 2020

The BLS report on employment and unemployment in counties and metropolitan areas for December was released this morning.  For Arkansas, the data showed that the changes reported in the remarkable state-wide report for December were widely reflected in local statistics across the state.

To review: When the state-level employment report was released two weeks ago, the most notable (incredible?) news was the decline in the unemployment rate from 6.3% to 4.2%.  Underlying the drop was a surge in the number of employed (up 5.6% from the previous month) and a sharp reduction in the number of unemployed (down 31.8% from November).  Taken at face value, this drop suggests that nearly one in three of those unemployed in November found employment in December (at least statistically speaking—gross labor market flows are more complex).  These figures are gleaned from the BLS’s Household Survey (a.k.a., the Current Population Survey), which is always subject to a wide range of uncertainty and which has been plagued by and problems during the pandemic.  Meanwhile, the nonfarm payroll statistics, generated from the Establishment Survey (officially known as the Current Economic Statistics survey), showed a significant  increase in total statewide employment in December—but nowhere near the magnitude of the increase reported in the Household Survey.

Metro Payroll Employment
Beginning with the metropolitan area report on nonfarm payroll employment:  The December report showed total employment up in five metros, down in two, and unchanged in Hot Springs.  In percentage terms, gains in Fayetteville, Little Rock, Memphis and Texarkana were greater than or equal to the statewide rate of increase.

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

Compared a December 2019, most metro areas showed employment declines in December 2020.  The exception was Jonesboro, which showed a 1.3% gain for the year.  Hot Springs has shown a remarkable rebound after experiencing the sharpest decline of any Arkansas metro area during March and April.  Compared to a year earlier, Hot Springs employment is down only 0.8%.  Among the other metros showing year-over-year declines, Fort Smith, Little Rock, Memphis and Pine Bluff registered larger percentage declines than the statewide average of -2.8%.

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

Metro Unemployment
On the Household Survey side of the report, sharp declines were registered for each metro area except Memphis. Unemployment rates in Fayetteville and Jonesboro dropped below 4% and Little Rock’s rate declined to 4.5%.

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

The largest decline in unemployment among metro areas was in Pine Bluff (-2.8 percentage points) and the smallest decline (excluding Memphis) was in Texarkana (-1.8 percentage points).  Compared to December 2019, unemployment rates are higher in all Metro areas, with the net changes ranging from +0.6 percentage points in Pine Bluff to up 3.5 percentage points in Memphis.

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

Comparing the numbers from the Household Survey (HH) and the Payroll Survey (NFPE), the first two columns of the table below compare percentage changes for employment from November to December, with obvious differences between the two. Memphis is a particular outlier for both measures,

The third column of the table shows the percentage changes in the number of unemployed from November to December.  The extreme drops in the number of unemployed are shared across most metro areas, with the exception of Memphis and Texarkana.

Source: Bureau of Labor Statistics and author’s calculations

The common patterns for most metropolitan areas within Arkansas—and the differences displayed by those with significant geographical regions outside of the state of Arkansas—leads one to suspect that the process of allocating estimated statewide changes to local areas might be important for interpreting the metro (and county) data.

County Unemployment Rates
There are no payroll employment statistics available on the county level, but the county statistics on unemployment broadly mirror the statewide data.  Each of Arkansas’ 75 counties registered unemployment rate declines, with changes ranging from -2.8 percentage points in Chicot and Mississippi Counties to -1.0 percentage points in Newton, Scott, and Yell Counties.  There is a notable negative relationship between the November-December changes in unemployment rates and the level of unemployment in November, with a correlation of -88%.  That is, counties with relatively high unemployment rates registered relatively large declines.

With the November-December declines taken into account, differences in unemployment rates around the state have therefore narrowed.  As illustrated in the interactive map below, nearly half of Arkansas’ counties registered unemployment rates below 4.0%, with the lowest in the state being Madison County at 2.8%.  At the upper end of the range, Chicot County retained the dubious distinction of having the highest unemployment rate in the state, but as noted above, a drop of 2.8 percentage points lowered the Chicot County’s unemployment rate to 8.4%.

In terms of the changes in the numbers of employed and unemployed, the county-level data closely correspond to the statewide totals.  The number of unemployed declined in all 75 counties, with changes ranging from -14.8% in Columbia County to -32.7% in Crittenden County.  The median change among the counties was -27.8%.  Similarly, increases in the number of employed were in a relatively tight range:  From +5.1% in Crittenden County to +2.8% in Montgomery County.  The median was +4.1%.

Overall, the statistics for Arkansas’ metro areas conform to the statewide totals released two weeks ago.  Given the current situation, measurement of key economic indicators is subject to wider-than-usual ranges of uncertainty.  That seems to be particularly true for the data associated with the Household Survey.  While the magnitudes of changes in employment and unemployment near the end of 2020 are subject to likely revisions, the overall takeaway from the December employment reports—state, metro, and county—is that labor market conditions improved in Arkansas toward the end of the year, albeit perhaps not as significantly as these initial statistics suggest.

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Arkansas Employment and Unemployment – December 2020

The state employment report for December, released this morning, suggest a very robust labor market improvement in Arkansas (to say the least!).  The headline, a 2.1% decline in the unemployment rate to 4.2%, is an unprecedented change.  While that particular statistic probably overstates the degree of the improvement, the details of the report suggest improvement nonetheless.

Source: Bureau of Labor Statistics

The sharp decline in the unemployment rate was both unexpected and surprising in its magnitude.  The national unemployment rate was previously reported as being unchanged at 6.7% for the month.  As indicated in the figure below, one-month changes in unemployment rates varied considerably among the states, with changes ranging from +2.0% in Colorado to -2.7% in New Jersey.  Arkansas’ change was the second-largest decline.  The median change was -0.1%.

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

The December drop in Arkansas unemployment is also surprising in the context of recent data on weekly unemployment insurance claims.  After dropping sharply over the summer months, the number of initial and continued claims for unemployment insurance in Arkansas had leveled off in November and December.

Source: Department of Labor

This suggests that today’s reported drop in the number unemployed was driven primarily by the underlying household survey results.  The decline was the largest on record, with unemployment falling by 26,639 from 83,863 to 48,186.  Meanwhile the survey respondents reported far better employment prospects:  The number of employed was reported to have increased by 65,543, another unprecedented change.  With the number of employed surging, the labor force evidently increased by 38,904.  The recent volatility of the labor force (the sum of employed and unemployed) is an indication of the uncertainty behind the unemployment estimates during 2020.  The Bureau of Labor Statistics has reported that the household survey has been plagued by misclassifications during the pandemic, and there is no clear economic explanation of such volatility in labor force participation, other than shifting definitions and classifications during turbulent times. The magnitudes of changes in the employed and unemployed figures in the December report suggests that measurement uncertainty is a factor that should be considered in interpreting the reported unemployment rate.

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

The unemployment statistics are scheduled to undergo their annual revisions over the next few weeks. These revisions typically smooth out some of the extreme month-to-month changes in the series.  However, during the pandemic, the BLS has adopted modified procedures for identifying outliers and applying seasonal factors.  It is not clear how the revisions might effect the preliminary estimates this year.

Payroll Employment
Although not as provocative as the drop in the unemployment rate, December’s report on nonfarm payroll employment does seem to corroborate an encouraging view of Arkansas labor market conditions.  The payroll data showed an increase of 4,300 jobs, or 0.35% (seasonally adjusted).  Compared to December 2019, employment was down 35,500, 2.8%.  The U.S. aggregate had previously been reported to have declined slightly for the month.

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

The December employment gains were particularly prominent in Retail Trade and in Professional and Business Services.  A more detailed breakdown shows that the increase in Professional & Business Services was primarily due to a surge in Administrative & Support Services.  Notable gains were also reported for Transportation & Utilities and Education & Health Services (primarily Health).  Employment in Leisure & Hospitality services suffered a setback in December, declining by 1,100 jobs after a remarkable recovery in the months from April through November.

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

Compared to the pre-COVID employment peak in February 2020, December’s employment levels showed a total decline of 35,300 jobs, with the bulk of those job-losses concentrated in Service-providing sectors and Manufacturing.  On the other hand, several sectors show net increases over the February-December period, with Professional & Business Services now added to the list of positive-growth sectors.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

 

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Metro Area Employment and Unemployment – November 2020

The latest employment report for metropolitan areas showed that nonfarm payroll employment expanded in most of Arkansas’ metropolitan area.  The exceptions were Memphis and Little Rock, which were both essentially unchanged.  Employment in Hot Springs, Jonesboro and Pine Bluff increased by 1.0% compared to the previous month, while Fayetteville, Fort Smith and Texarkana saw somewhat smaller increases.

Source: Bureau of Labor Statistics

Since the employment trough of April 2020, Hot Springs has shown the strongest bounce-back:  Up 17.0% in seven months.  Hot Springs had previously experienced the largest percentage decline in employment over the February-April contraction.  The smallest percentage recovery has been in Pine Bluff, which experienced a relatively small downturn early in the year but has seen sluggish recovery in the period since April.  Relative to pre-pandemic employment levels, Jonesboro had recovered by September and continues to tally net gains for the year.  The other metro areas in Arkansas remain below levels of February 2020, with net losses ranging from -0.8% in Texarkana to -4.5% in Little Rock.

Source: Bureau of Labor Statistics

Unemployment rates in Arkansas’ metro areas were generally little changed from the previous month.  In Fayetteville and Pine Bluff, unemployment rates were unchanged.  In Fort Smith, Hot Springs, Jonesboro, and Little Rock, unemployment rates declined by 0.1%.  Larger changes were registered for Memphis and Texarkana: The unemployment rate in Memphis declined three full percentage points, from 9.9% to 6.9%.  In Texarkana the unemployment rate increased by 0.9 percentage points, from 6.2% to 7.1%.

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

At the county level, unemployment rates were unchanged or higher in 66 counties in November, with unemployment rate declines in only nine counties.  The largest decline was in Pulaski County, down 0.3 percentage points from 7.7% to 7.4%.  As indicated in the interactive map below, counties with higher unemployment rates tend to be clustered in the eastern and southern portions of the state, with lower rates more prevalent in west and central Arkansas.  Larger metropolitan areas also continue to show somewhat higher unemployment rates than the more rural areas.  Madison County continues to register the lowest unemployment rate in the state at 3.9%, while Chicot County has the highest rate: 10.9%.

 

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Metro Area Employment and Unemployment – November 2020

The latest employment report for metropolitan areas showed that nonfarm payroll employment expanded in most of Arkansas’ metropolitan area.  The exceptions were Memphis and Little Rock, which were both essentially unchanged.  Employment in Hot Springs, Jonesboro and Pine Bluff increased by 1.0% compared to the previous month, while Fayetteville, Fort Smith and Texarkana saw somewhat smaller increases.

Source: Bureau of Labor Statistics

Since the employment trough of April 2020, Hot Springs has shown the strongest bounce-back:  Up 17.0% in seven months.  Hot Springs had previously experienced the largest percentage decline in employment over the February-April contraction.  The smallest percentage recovery has been in Pine Bluff, which experienced a relatively small downturn early in the year but has seen sluggish recovery in the period since April.  Relative to pre-pandemic employment levels, Jonesboro had recovered by September and continues to tally net gains for the year.  The other metro areas in Arkansas remain below levels of February 2020, with net losses ranging from -0.8% in Texarkana to -4.5% in Little Rock.

Source: Bureau of Labor Statistics

Unemployment rates in Arkansas’ metro areas were generally little changed from the previous month.  In Fayetteville and Pine Bluff, unemployment rates were unchanged.  In Fort Smith, Hot Springs, Jonesboro, and Little Rock, unemployment rates declined by 0.1%.  Larger changes were registered for Memphis and Texarkana: The unemployment rate in Memphis declined three full percentage points, from 9.9% to 6.9%.  In Texarkana the unemployment rate increased by 0.9 percentage points, from 6.2% to 7.1%.

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

At the county level, unemployment rates were unchanged or higher in 66 counties in November, with unemployment rate declines in only nine counties.  The largest decline was in Pulaski County, down 0.3 percentage points from 7.7% to 7.4%.  As indicated in the interactive map below, counties with higher unemployment rates tend to be clustered in the eastern and southern portions of the state, with lower rates more prevalent in west and central Arkansas.  Larger metropolitan areas also continue to show somewhat higher unemployment rates than the more rural areas.  Madison County continues to register the lowest unemployment rate in the state at 3.9%, while Chicot County has the highest rate: 10.9%.

 

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Arkansas GDP During the Pandemic

State-level GDP data for the third quarter were released over the holidays (December 23).  The latest data showed that Arkansas Real GDP increased 7.1% in Q3 (an annual rate of 31.8%).  The nationwide growth rate was 7.5% (annual rate 33.4%).  The change in real GDP was positive for all 50 states plus the District of Columbia, with annual growth rates ranging from 52.2% in Nevada to 19.2% in D.C. It was generally the case that states that had experienced the largest downturns in the first half of the year rebounded to have higher growth rates in the third quarter.

As illustrated in the figure below, U.S. GDP declined by 10.1% between 2019:Q4 and 2020:Q2, while Arkansas GDP declined by 8.8%.  After the third quarter increases, U.S. GDP remained 3.4% lower than its level at the end of 2019.  Arkansas GDP was down only 2.3%.

Source: Bureau of Economic Analysis

The table below decomposes the changes during 2020 by major industry sector for Arkansas and the U.S.  In many of the most pandemic-sensitive sectors (e.g. Accommodation and Food Services) the declines over the first half of 2020 were smaller in Arkansas than the U.S. average.  For most sectors, the third-quarter recovery brings Arkansas closer to pre-pandemic production levels.  In some sectors, Arkansas GDP growth has moved into positive territory, with total Q3 output above levels of 2019:Q4.

Source: Bureau of Economic Analysis

Although the third-quarter GDP increases represent significant recovery from the economic downturn in the first half of 2020, it is likely that many service-related sectors will remain remain below total capacity for some time as efforts to control the COVID-19 pandemic continue.

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Arkansas GDP During the Pandemic

State-level GDP data for the third quarter were released over the holidays (December 23).  The latest data showed that Arkansas Real GDP increased 7.1% in Q3 (an annual rate of 31.8%).  The nationwide growth rate was 7.5% (annual rate 33.4%).  The change in real GDP was positive for all 50 states plus the District of Columbia, with annual growth rates ranging from 52.2% in Nevada to 19.2% in D.C. It was generally the case that states that had experienced the largest downturns in the first half of the year rebounded to have higher growth rates in the third quarter.

As illustrated in the figure below, U.S. GDP declined by 10.1% between 2019:Q4 and 2020:Q2, while Arkansas GDP declined by 8.8%.  After the third quarter increases, U.S. GDP remained 3.4% lower than its level at the end of 2019.  Arkansas GDP was down only 2.3%.

Source: Bureau of Economic Analysis

The table below decomposes the changes during 2020 by major industry sector for Arkansas and the U.S.  In many of the most pandemic-sensitive sectors (e.g. Accommodation and Food Services) the declines over the first half of 2020 were smaller in Arkansas than the U.S. average.  For most sectors, the third-quarter recovery brings Arkansas closer to pre-pandemic production levels.  In some sectors, Arkansas GDP growth has moved into positive territory, with total Q3 output above levels of 2019:Q4.

Source: Bureau of Economic Analysis

Although the third-quarter GDP increases represent significant recovery from the economic downturn in the first half of 2020, it is likely that many service-related sectors will remain remain below total capacity for some time as efforts to control the COVID-19 pandemic continue.

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Arkansas Employment and Unemployment – November 2020

The pace of recovery in Arkansas labor markets showed clear signs of slowing in November, following similar patterns as the national data released two weeks ago.  Today’s news release from the Bureau of Labor Statistics reported that Arkansas’ unemployment rate was unchanged from October, remaining at 6.2%.  The national unemployment rate declined only 0.2% for the month, falling from 6.9% to 6.7%.

Source: Bureau of Labor Statistics

The underlying components of the unemployment rate showed small changes from October to November:  The number of employed was reported down 2,746 and the number of unemployed declined by 179–essentially unchanged.   The labor force, the sum of employed and unemployed, declined by 2,925.

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

Volatility in the labor force data reflects the difficulty of measuring rapidly changing employment conditions that have prevailed in 2020.  From the early stages of the pandemic through the summer recovery months, labor flows were particularly fluid, with the data suggesting that people were moving between employment and unemployment, as well as in and out of the labor force, at an unprecedented pace. As that pace has slowed, the data are suggesting that labor force participation is down by about 35,000 from a year earlier.  In terms of labor force participation rates, Arkansas has fallen to 56.3%, down 1.9 percentage points from February.  Over the same period, the net change in the U.S. participation rate has also been -1.9 percentage points.

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm payroll employment increased by 4,500 in November (seasonally adjusted).  Job growth continues, but at a slower pace than during the initial stages of economic rebound.  After seven months of recovery from the April 2020 employment trough, Arkansas payroll employment remains 3.2% below its pre-pandemic level in February.  Nationwide, the net change from February through November was 6.5%.  As of November, U.S. employment has now recovered over half of the jobs lost from February through April, while the recovery in Arkansas has amounted to nearly two-thirds of the initial job-losses.

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

Breaking down the employment data by sector, we see that ongoing employment declines are concentrated in sectors directly affected by economic shut-downs and social-distancing limitations,  Education and Health Services, Leisure and Hospitality Services and Other Services account for the bulk of net job losses during 2020.  Government employment is also down, primarily associated with lower employment by public schools, colleges and universities.  Manufacturing employment has also been slow to recover but showed a relatively strong increase in November.  The list of sectors in which employment has fully recovered to pre-February levels include Construction, Wholesale and Retail Trade, Transportation & Utilities, and Professional & Business Services.

The concentration of ongoing job losses in the service sectors suggests a simple explanation for the recent slow-down in employment recovery both in Arkansas and nationwide:  Many service-related businesses continue to operate well below capacity, due to both formal and informal restrictions to encourage social distancing. As long as those sectors are operating under such constraints, the extent of full recovery is limited.  Businesses have been extraordinarily innovative during the pandemic, but there so far we can proceed to getting the economy back to “normal” until we are able to put the COVID-19 pandemic, and efforts to control it, behind us.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

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Arkansas Employment and Unemployment – November 2020

The pace of recovery in Arkansas labor markets showed clear signs of slowing in November, following similar patterns as the national data released two weeks ago.  Today’s news release from the Bureau of Labor Statistics reported that Arkansas’ unemployment rate was unchanged from October, remaining at 6.2%.  The national unemployment rate declined only 0.2% for the month, falling from 6.9% to 6.7%.

Source: Bureau of Labor Statistics

The underlying components of the unemployment rate showed small changes from October to November:  The number of employed was reported down 2,746 and the number of unemployed declined by 179–essentially unchanged.   The labor force, the sum of employed and unemployed, declined by 2,925.

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

Volatility in the labor force data reflects the difficulty of measuring rapidly changing employment conditions that have prevailed in 2020.  From the early stages of the pandemic through the summer recovery months, labor flows were particularly fluid, with the data suggesting that people were moving between employment and unemployment, as well as in and out of the labor force, at an unprecedented pace. As that pace has slowed, the data are suggesting that labor force participation is down by about 35,000 from a year earlier.  In terms of labor force participation rates, Arkansas has fallen to 56.3%, down 1.9 percentage points from February.  Over the same period, the net change in the U.S. participation rate has also been -1.9 percentage points.

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm payroll employment increased by 4,500 in November (seasonally adjusted).  Job growth continues, but at a slower pace than during the initial stages of economic rebound.  After seven months of recovery from the April 2020 employment trough, Arkansas payroll employment remains 3.2% below its pre-pandemic level in February.  Nationwide, the net change from February through November was 6.5%.  As of November, U.S. employment has now recovered over half of the jobs lost from February through April, while the recovery in Arkansas has amounted to nearly two-thirds of the initial job-losses.

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

Breaking down the employment data by sector, we see that ongoing employment declines are concentrated in sectors directly affected by economic shut-downs and social-distancing limitations,  Education and Health Services, Leisure and Hospitality Services and Other Services account for the bulk of net job losses during 2020.  Government employment is also down, primarily associated with lower employment by public schools, colleges and universities.  Manufacturing employment has also been slow to recover but showed a relatively strong increase in November.  The list of sectors in which employment has fully recovered to pre-February levels include Construction, Wholesale and Retail Trade, Transportation & Utilities, and Professional & Business Services.

The concentration of ongoing job losses in the service sectors suggests a simple explanation for the recent slow-down in employment recovery both in Arkansas and nationwide:  Many service-related businesses continue to operate well below capacity, due to both formal and informal restrictions to encourage social distancing. As long as those sectors are operating under such constraints, the extent of full recovery is limited.  Businesses have been extraordinarily innovative during the pandemic, but there so far we can proceed to getting the economy back to “normal” until we are able to put the COVID-19 pandemic, and efforts to control it, behind us.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

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Arkansas Personal Income – 2020:Q3

New data from the Bureau of Economic Analysis released today shows that Arkansas personal income declined by 5.5% in the third quarter — corresponding to a -20.3% annual rate.  Nationwide, personal income was down 2.6% (a 10.0% annual rate).  The BEA reported that income was lower in all 50 states, with annualized percent declines ranging from -0.6% in Georgia to -29.9% in West Virginia.

The third quarter declines were driven primarily by decreases in personal current transfer receipts as the impact of CARES Act relief payments declined from their second-quarter surge.  Revised data showed that transfer receipts in Arkansas rose 57.0% in the second quarter and declined by 24.6% in the third.  The national averages showed a second-quarter increase of 75.4% and a third-quarter decline of 23.0%.

After the second-quarter increases and third quarter declines, Arkansas personal income was up 4.1% relative to Q1, with the corresponding U.S. total up 5.1%.

Source: Bureau of Economic Analysis

Net of transfer payments, Arkansas personal income categories generally showed encouraging increases in the third quarter. All major components of earnings increased in Q3, with Proprietors’ Income rebounding sharply from its decline in the second quarter.  Dividends, Interest, and Rent was down slightly.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

In addition to the increases in third-quarter earnings, today’s report contained some relatively large revisions to data from the second quarter.  Most encouraging, wage and salary disbursements were revised 4.0% higher than originally reported.  The surge in transfer receipts in the second quarter was also revised higher for Arkansas.

Source: Bureau of Economic Analysis

Net of transfers, the third quarter data show significant recovery from the sharp declines in the second-quarter. Compared to the first quarter of the year, Arkansas Personal Income Less Transfer Payments was down by only 0.3% in Q3.  Nationwide, Income less transfers was down 1.0%.

Source: Bureau of Economic Analysis

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Special Reports: Impact of Covid-19 on the Arkansas Economy

Arkansas Consumer Spending in 2020
One of the most significant and unexpected features of the Arkansas economy during the COVID-19 pandemic has been the robust behavior of consumer spending…
Read more…

Leisure and Hospitality Industries in Arkansas–2020
Of all the sectors of the economy hat have been disrupted by the COVID-19 pandemic, industries in the Leisure and Hospitality category have been among the hardest-hit…
Read more…

Forecast Update (July)
“Incoming data have continued to show a more rapid recovery from the COVID-19 shutdowns than previously expected.”
Read more…

Forecast Update (June)
Information since May has suggested that Arkansas has not been as severely impacted as other parts of the country, and that the sharp declines in national employment have abated.
Read more…

Forecast Update (May)
“The economic impact of the COVID-19 pandemic continues to be more rapid and more severe than initially expected… In this updated report we present new projections for the Arkansas economy.”
Read more…

Forecast Update (April)
“In this note we update that forecast with new estimates of the magnitude of the downturn. We also update and extend our previous guidance on how the forecast is likely to impact sales tax receipts of local governments.”
Read more …

Implications for Local Government Sales Tax Collections
“In this note, we focus on consumer spending and the outlook for sales tax collections by county and municipal governments.” Read more…

Arkansas Economic Outlook (March)
“It appears that a dramatic downturn in economic activity over the remainder of 2020 is unavoidable for the nation and for Arkansas.”  Read more…

 

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