A forum for information and analysis on the Arkansas economy

Metro Area Employment and Unemployment – January 2021

New data on employment and unemployment for metropolitan areas came out this morning.  The data are in that awkward mid-revision phase that happens every year at this time, but the new information is informative.

Tables from today’s news release show revised unemployment rates for January and December 2020, along with preliminary estimates for January 2021.  As shown in the figure below, unemployment rates were revised higher for each of Arkansas’ metro areas except Memphis. Unemployment rates increased in all eight metros in January, but that is expected for not-seasonally adjusted data.

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

The December-January increases were largest for Hot Springs, Pine Bluff, and Texarkana, while Memphis and Fayetteville saw smaller increases.  Compared to January 2020, unemployment rates were higher across the board, with the largest year-over-year increases in Hot Springs, Memphis and Texarkana.

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

Payroll Employment
Metropolitan area data on Nonfarm Payroll Employment have been fully revised, and the new numbers show some unexpected changes to patterns of employment around the state (at least within metro areas).  As shown in the figures below, the revisions were particularly significant for Jonesboro and Texarkana.  In both areas, the declines in employment in April 2020 now appear to have been much larger than originally estimated, and recovery to pre-pandemic employment levels has been far slower.  Revisions to data for Hot Springs show the same pattern, but with smaller revisions to previously reported levels.  Note, however, the sharp drop in employment in Hot Springs in January 2021 (more below). On the other hand, employment growth since April was revised higher in several metros, including Fayetteville, Fort Smith, and Pine Bluff.

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

The magnitudes of the revisions are detailed in the table below.  As shown in the first column, the net impact of revisions on employment levels in December 2020 were mixed.  The slower pace of recovery in Jonesboro, Texarkana and Memphis resulted in significantly lower employment at the end of the year, while Fayetteville, Fort Smith, Little Rock and Pine Bluff are now estimated to have higher employment than previously reported.

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

Payroll employment increased in January in most metro areas; however, as shown in the table below, employment was down in Jonesboro and Memphis and experienced a particularly sharp drop in Hot Springs.  Compared to a year ago, employment is down across the state.  Prior to the revision, Jonesboro was registering a positive year-over-year growth rate, but the new data show it down by more than the statewide average.  The largest year-over-year declines are recorded for Little Rock and Texarkana.  At the other extreme, having expanded 9.8% since April 2020, employment in the Fayetteville metro area is down by only one percent from pre-pandemic levels.

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

The full set of revisions to labor force, employment and unemployment will be available at the time of next month’s release, scheduled for April 16, 2021.

 

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Arkansas Employment and Unemployment – January 2021

New state-level data on employment and unemployment shows that the state’s economy is continuing to recover from the pandemic-related contraction in 2020.  Today’s report from the Bureau of Labor Statistics includes a decline in the unemployment rate and an increase in nonfarm payroll employment.  The payroll data released this morning also includes annual benchmark revisions.

The unemployment data were revised last week to show a December unemployment rate of 4.9%.  Today’s report shows an additional decline of 0.3 percentage points, resulting in a January unemployment rate of 4.6%.  The U.S. unemployment rate was 6.3% in January and 6.2% in February.

Source: Bureau of Labor Statistics

The number of unemployed Arkansans continued to decline, falling by over 3,600 to 63,536.  The payroll survey indicated only a modest increase in employment (+275), so the labor force shrank by 3,360.  The figure below shows the most recent changes in the context of the revised data released last week.

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

Payroll Employment
Today’s report included the results of the annual benchmark revision procedures, in which payroll data for the past 21 months are updated and revised.  Accordingly, all data were revised from April 2019 forward.  Seasonal factors were revised back to 2016.  Some series (both seasonally adjusted and not seasonally adjusted) were revised back as far as 1990. As shown in the figure below, the revisions had notable impacts on Arkansas employment:  Employment growth was revised higher for 2019, raising the precipice from which employment plunged in April 2020.  Over the remainder of 2020, the revised statistics show a more rapid pace of recovery as well.

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

The table below summarizes the change in total employment over the course of 2020, showing both previously-published and revised data broken down by sector.  The revised data show larger pandemic-related declines in April for most sectors, with notable exceptions including Manufacturing, Education & Health Services, and Other Services.  During the April-December period, the revised data generally show larger rebounds in most sectors.  An important exception is Retail, where employment was previously estimated to have increased 19,800 over the 8-month period but is now estimated to have increased by 16,900.

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

The final two columns of the table present the monthly change for January, reported this morning, along with a year-over-year comparison with January 2020.  Overall, 2,300 jobs were added in January (seasonally adjusted), with gains particularly prominent in the goods-producing sectors of Construction and Manufacturing.  Compared to a year earlier, the January numbers show net job losses totaling 33,600.  Education & Health Services and Leisure & Hospitality Services together constitute over half of the total losses.

The figure below compares employment growth in Arkansas with that of the U.S., showing employment indexes normalized to equal 100 in the pre-pandemic month of February 2020.  The decline from February to April was 9.8% (previously reported at 9.3%) compared to -14.6% for the U.S.  As of January 2021, Arkansas payroll employment had returned to a level of only 2.5% below February 2020, while U.S. employment remained 6.5% lower.

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

# # #

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 Unemployment in 2020 – Revised

Last week, the Bureau of Labor Statistics (BLS) released revised data for state unemployment rates in 2020.  The COVID-19 pandemic presented a number of challenges in collecting data, modeling, and measurement.  Throughout the year, the BLS adopted modified procedures for handling “outliers.”  Outliers are unusually large changes in the data that are usually attributable to sampling error or other technical issues, but in this case represented the actual impact of COVID-related idling of workers.  Without getting too deep into the weeds, the new revised statistics were produced using “a new generation of time-series models” that provides more flexibility in incorporating information from the trend-covariates, Nonfarm Payroll Employment and Unemployment Insurance Claims.

The data were revised all the way back to 1976 using the new methodology, but most of the significant revisions affect the data for 2020.  The figure below shows how the revisions affected the unemployment rate for Arkansas.  The new statistics generally show lower unemployment in Arkansas than previously estimated.  The rate rose only slightly in March, and peaked at 10.0% in April, compared to the previously-estimated peak of 10.8%.  Thereafter, the new estimates show a steady downward trajectory with the unemployment rate ending the year in December at 4.9% rather than 4.2% as originally estimated.

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

The data on numbers of employed and unemployed that underlie the unemployment rate calculations are shown below.  The overall contour of revised unemployment rate changes during 2020 derives primarily from revisions to the number of unemployed.  For both March 2020 and December 2020, the new data eliminate previously-reported large jumps in the number of unemployed.  In intervening months, the new numbers show a more gradual decline.

New estimates of employment and total labor force were also revised considerably.  The initial drop in employment in April 2020 is now estimated to have been only 84 thousand, rather than the originally-reported 148 thousand.  The uneven pattern of employment recovery is now smoother than previously reported, although a large spike in employment in December 2020 remains.  With regard to the labor force, the changes to both components—employed and unemployed—contribute to a smoother profile with an initial drop in  participation in May followed by further declines through November, with a sharp recovery in December.

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

After revision, Arkansas’ unemployment rate compares more favorably to the nationwide average than before.  The April spike in unemployment was 4.8 percentage points higher for the U.S. than for Arkansas, and our state’s unemployment rate ended the year 1.8 percentages lower than the U.S. average.

The sharp jump in December’s estimates for employment and labor force are somewhat mysterious, and are not reinforced by data from the nonfarm payroll survey (although the payroll data will be revised next week).  After the December increase, the labor force participation rate appears to be back on track in Arkansas, while continuing to lag below pre-pandemic levels for the U.S.

Source: Bureau of Labor Statistics

 

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Leisure and Hospitality Industries in Arkansas – 2020

Of all the sectors of the economy that have been disrupted by the COVID-19 pandemic, industries in the Leisure and Hospitality category have been among the hardest-hit.  These industries continue to show persistent declines in sales and employment, with many businesses remaining at-risk while other sectors of the economy recover.

This article documents the performance of Leisure and Hospitality industries in Arkansas relative to the United States as a whole.  Using payroll employment data and statistics derived from tax-collection data, we show that Arkansas has experienced smaller downturns in the Leisure and Hospitality sector than the national average, but the data also suggest persistent declines at both the state and national levels.

Figure 1 shows the composition and relative sizes of industries within the Leisure and Hospitality sector, in terms of employment shares in 2019. The total sector represents a smaller employment share in Arkansas than in the national totals, 9.4% versus 11.0%.  Restaurants and bars account for the overwhelming share of employment within the Leisure and Hospitality sector, particularly in Arkansas.

Figure 1:
Source: U.S. Bureau of Labor Statistics

Food Services and Drinking Places
The largest subset of industries in the Leisure and Hospitality Sector comprises bars and restaurants.  As shown in Figure 2, employment dropped dramatically in April 2020, falling more than 48% from the previous year nationwide.  In Arkansas the decline was somewhat smaller—only 38.5%.  After recovering during the summer months, employment levels were still down nearly 20% nationwide and about 10% in Arkansas at the end of the year.

Figure 2:
Source:  U.S. Bureau of Labor Statistics

 Figure 3 shows sales figures for the Food Services & Drinking Places sector.  Data for the U.S. are drawn from the U.S. Retail Trade and Food Services survey, published by the U.S. Census Bureau.  Sales figures for Arkansas are derived from county-level sales tax revenue, available by four-digit industry sector from the Arkansas Department of Finance and Administration.  Tax distributions for Food Services and Drinking Places are extracted from the overall figures, adjusted for changes in tax rates, then aggregated across counties.

The percentage changes in sales shown in Figure 3 display a pattern similar to the employment changes in Figure 2.  Nationwide restaurant and bar sales plunged over 50%, while in Arkansas the drop was 24%. By October, nationwide sales remained 12.5% below year-ago levels, while Arkansas sales had recovered to near pre-pandemic levels.  However, data available for November and December suggest renewed weakness.

Figure 3:
Sources: U.S. Census Bureau, Arkansas Department of Finance and Administration, Arkansas Economic Development Institute

Accommodations
The Accommodations industry includes hotels and motels, campgrounds, RV parks, etc.  Employment in the Accommodations nationwide dropped 43% in April 2020 and was down 48% in May.  In Arkansas the decline was approximately 35.5% in both months. Employment levels in the industry remain low.  For the U.S., employment in Accommodations was down nearly 33% in December from the previous year.  In Arkansas it was down about 25%.

Figure 4:
Source:  U.S. Bureau of Labor Statistics

There are two measures of state-level sales available to consider:  in addition to the county sales tax statistics, the state collects a 2% Tourism Tax that applies directly to the service of providing “accommodation to a transient guest.” Figure 4 shows year-over-year growth rates of these two proxies for sales in the Accommodations industry.  They show very similar patterns, especially the COVID-related downturn in April which amounted to a loss of approximately two-thirds of total revenues in the Accommodations sector.

Figure 5:
Sources: Department of Finance and Administration, Arkansas Economic Development Institute

The two revenue measures diverge during the summer months, with county sales tax receipts showing sustained declines from the previous year (down 23%) while the tourism tax indicated a slightly better recovery from the spring downturn.  One possible explanation of this patterns is that the tourism tax applies solely to accommodations, while the sales tax applies to other services provided by hotels and motels, including catering, providing meeting space, etc.  The sustained decline in the sales tax measure suggests that revenue losses in the Accommodation industry run deeper than just a dearth of travelers.

To give an indication of how sales in the Accommodation industry in Arkansas compare to national trends, Figure 6 compares the Arkansas tourism tax to a national measure of revenue per available room.  Under the assumption that the number of available rooms an Arkansas has changed little over time, the national revenue per room should correspond to the Arkansas revenue measure derived from the tourism tax.  Figure 6 shows that the decline in revenues nationwide was even sharper than the downturn in Arkansas.  Revenue per room in April was down 80% from the previous year, and continues to trend 50% lower than pre-pandemic levels.

Figure 6:
Sources: Arkansas Department of Finance and Administration, STR Global.

Arts, Entertainment, and Recreation
The final set of industries to consider in the Leisure and Hospitality Sector is Arts, Entertainment and Recreation.  This category covers a wide range of industries, including Performing Arts, Spectator Sports, Museums, Amusement Parks, Gambling Industries and other various Amusement and Recreation activities.  Figure 7 shows employment in this set of industries for Arkansas and the U.S.  While U.S. employment plunged over 50% in April and May, Arkansas dropped only 12.4%.  By the end of 2020, nationwide employment was still down 30%, while Arkansas recovered to only 5% below the previous year.

Figure 7:
Source:  U.S. Bureau of Labor Statistics

Sales tax data for industries in Arts, Entertainment and Recreation are somewhat sparse.  In any specific county, data are suppressed in sectors with fewer than three firms, so the totals are likely incomplete.  Moreover, comparable sales data on the national level are available only on a quarterly basis (from the U.S. Census Bureau’s Quarterly Services Survey).  Figure 8 displays year-over-year growth rates Arkansas and the U.S.  The Arkansas figures are constructed by aggregating total county-level sales tax data for the entire set of industries, then averaging over calendar quarters.  The series for the U.S. is the growth rate of Total Revenue for Arts, Entertainment, and Recreation from the Census Bureau.

Figure 8:
Sources: Arkansas Department of Finance and Administration, Arkansas Economic Development Institute, U.S. Census Bureau

The revenue data for the U.S. show a pattern similar to the employment data.  A sharp drop in the second quarter of 2020 represented a 57% decline from the previous year, and revenues remained down more than 30% by the end of the year.  In Arkansas, the second-quarter decline was only 28.4%. Arkansas revenues from Arts, Entertainment, and Recreation recovered sharply in the third quarter, but data for the fourth quarter suggests renewed weakness.

As comparisons in other industries have shown, economic activity in Arkansas was not as severely impacted by the COVID-19 pandemic as in other parts of the nation.  This appears to be true for Leisure and Hospitality sectors as well.  Although employment, sales and revenue have partly recovered from sharp declines in the spring of 2020, economic activity in the Leisure and Hospitality industries remained well below year-earlier levels at the end of 2020.

A PDF file of this report is available HERE.

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Leisure and Hospitality Industries in Arkansas – 2020

Of all the sectors of the economy that have been disrupted by the COVID-19 pandemic, industries in the Leisure and Hospitality category have been among the hardest-hit.  These industries continue to show persistent declines in sales and employment, with many businesses remaining at-risk while other sectors of the economy recover.

This article documents the performance of Leisure and Hospitality industries in Arkansas relative to the United States as a whole.  Using payroll employment data and statistics derived from tax-collection data, we show that Arkansas has experienced smaller downturns in the Leisure and Hospitality sector than the national average, but the data also suggest persistent declines at both the state and national levels.

Figure 1 shows the composition and relative sizes of industries within the Leisure and Hospitality sector, in terms of employment shares in 2019. The total sector represents a smaller employment share in Arkansas than in the national totals, 9.4% versus 11.0%.  Restaurants and bars account for the overwhelming share of employment within the Leisure and Hospitality sector, particularly in Arkansas.

Figure 1:
Source: U.S. Bureau of Labor Statistics

Food Services and Drinking Places
The largest subset of industries in the Leisure and Hospitality Sector comprises bars and restaurants.  As shown in Figure 2, employment dropped dramatically in April 2020, falling more than 48% from the previous year nationwide.  In Arkansas the decline was somewhat smaller—only 38.5%.  After recovering during the summer months, employment levels were still down nearly 20% nationwide and about 10% in Arkansas at the end of the year.

Figure 2:
Source:  U.S. Bureau of Labor Statistics

 Figure 3 shows sales figures for the Food Services & Drinking Places sector.  Data for the U.S. are drawn from the U.S. Retail Trade and Food Services survey, published by the U.S. Census Bureau.  Sales figures for Arkansas are derived from county-level sales tax revenue, available by four-digit industry sector from the Arkansas Department of Finance and Administration.  Tax distributions for Food Services and Drinking Places are extracted from the overall figures, adjusted for changes in tax rates, then aggregated across counties.

The percentage changes in sales shown in Figure 3 display a pattern similar to the employment changes in Figure 2.  Nationwide restaurant and bar sales plunged over 50%, while in Arkansas the drop was 24%. By October, nationwide sales remained 12.5% below year-ago levels, while Arkansas sales had recovered to near pre-pandemic levels.  However, data available for November and December suggest renewed weakness.

Figure 3:
Sources: U.S. Census Bureau, Arkansas Department of Finance and Administration, Arkansas Economic Development Institute

Accommodations
The Accommodations industry includes hotels and motels, campgrounds, RV parks, etc.  Employment in the Accommodations nationwide dropped 43% in April 2020 and was down 48% in May.  In Arkansas the decline was approximately 35.5% in both months. Employment levels in the industry remain low.  For the U.S., employment in Accommodations was down nearly 33% in December from the previous year.  In Arkansas it was down about 25%.

Figure 4:
Source:  U.S. Bureau of Labor Statistics

There are two measures of state-level sales available to consider:  in addition to the county sales tax statistics, the state collects a 2% Tourism Tax that applies directly to the service of providing “accommodation to a transient guest.” Figure 4 shows year-over-year growth rates of these two proxies for sales in the Accommodations industry.  They show very similar patterns, especially the COVID-related downturn in April which amounted to a loss of approximately two-thirds of total revenues in the Accommodations sector.

Figure 5:
Sources: Department of Finance and Administration, Arkansas Economic Development Institute

The two revenue measures diverge during the summer months, with county sales tax receipts showing sustained declines from the previous year (down 23%) while the tourism tax indicated a slightly better recovery from the spring downturn.  One possible explanation of this patterns is that the tourism tax applies solely to accommodations, while the sales tax applies to other services provided by hotels and motels, including catering, providing meeting space, etc.  The sustained decline in the sales tax measure suggests that revenue losses in the Accommodation industry run deeper than just a dearth of travelers.

To give an indication of how sales in the Accommodation industry in Arkansas compare to national trends, Figure 6 compares the Arkansas tourism tax to a national measure of revenue per available room.  Under the assumption that the number of available rooms an Arkansas has changed little over time, the national revenue per room should correspond to the Arkansas revenue measure derived from the tourism tax.  Figure 6 shows that the decline in revenues nationwide was even sharper than the downturn in Arkansas.  Revenue per room in April was down 80% from the previous year, and continues to trend 50% lower than pre-pandemic levels.

Figure 6:
Sources: Arkansas Department of Finance and Administration, STR Global.

Arts, Entertainment, and Recreation
The final set of industries to consider in the Leisure and Hospitality Sector is Arts, Entertainment and Recreation.  This category covers a wide range of industries, including Performing Arts, Spectator Sports, Museums, Amusement Parks, Gambling Industries and other various Amusement and Recreation activities.  Figure 7 shows employment in this set of industries for Arkansas and the U.S.  While U.S. employment plunged over 50% in April and May, Arkansas dropped only 12.4%.  By the end of 2020, nationwide employment was still down 30%, while Arkansas recovered to only 5% below the previous year.

Figure 7:
Source:  U.S. Bureau of Labor Statistics

Sales tax data for industries in Arts, Entertainment and Recreation are somewhat sparse.  In any specific county, data are suppressed in sectors with fewer than three firms, so the totals are likely incomplete.  Moreover, comparable sales data on the national level are available only on a quarterly basis (from the U.S. Census Bureau’s Quarterly Services Survey).  Figure 8 displays year-over-year growth rates Arkansas and the U.S.  The Arkansas figures are constructed by aggregating total county-level sales tax data for the entire set of industries, then averaging over calendar quarters.  The series for the U.S. is the growth rate of Total Revenue for Arts, Entertainment, and Recreation from the Census Bureau.

Figure 8:
Sources: Arkansas Department of Finance and Administration, Arkansas Economic Development Institute, U.S. Census Bureau

The revenue data for the U.S. show a pattern similar to the employment data.  A sharp drop in the second quarter of 2020 represented a 57% decline from the previous year, and revenues remained down more than 30% by the end of the year.  In Arkansas, the second-quarter decline was only 28.4%. Arkansas revenues from Arts, Entertainment, and Recreation recovered sharply in the third quarter, but data for the fourth quarter suggests renewed weakness.

As comparisons in other industries have shown, economic activity in Arkansas was not as severely impacted by the COVID-19 pandemic as in other parts of the nation.  This appears to be true for Leisure and Hospitality sectors as well.  Although employment, sales and revenue have partly recovered from sharp declines in the spring of 2020, economic activity in the Leisure and Hospitality industries remained well below year-earlier levels at the end of 2020.

A PDF file of this report is available HERE.

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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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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.

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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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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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