Arkansas employment – Page 10 – Arkansas Economist

Expected Employment Revisions – 2011

by Michael Pakko
Arkansas Economic Forecast Conference, Employment/Unemployment, General Information
November 8, 2011

News coverage of the Arkansas Economic Forecast Conference featured the forecast of an “expected future revision of history.” Just as in 2009, it appears likely that the annual benchmark revision of payroll employment data will include sharply lower estimates for Arkansas employment in 2011. Compared to currently-published estimates, the revised data will show about 11,000 fewer jobs.

The monthly payroll employment data come from the BLS’s Current Employment Statistics (CES) program. According the the BLS, the CES surveys “about 150,000 businesses and government agencies, representing approximately 390,000 individual worksites.” Each year, however, the CES data are revised to match the more-comprehensive Quarterly Census of Employment and Wages (QCEW). The QCEW is a detailed account of employment, disaggregated by sectors and by counties. It is constructed from state unemployment insurance records, so it constitutes a full accounting of all covered jobs in the nation.

Because of it’s comprehensive coverage, the QCEW provides a more accurate picture of employment than the CES. But it also takes longer to compile — data for the first quarter of 2011 were published just last month. When the revised CES payroll employment data are released next March, it is this 2011:Q1 QCEW data that will be used as a benchmark. The benchmark revision process is a detailed exercise that affects data for each individual sector and each state and metro area in the U.S. — that’s why we won’t find out the results until March 2012.

But it is possible to estimate the approximate magnitude of the revisions for Arkansas using simple linear regression techniques.* Based on this analysis, we forecast that the CES data for Arkansas will be revised sharply downward in the first quarter of 2011 — down approximately 11,000 jobs. The lower employment in 2011:Q1 will carry through for the rest of the year, resulting in a permanently lower level of employment estimates for 2011.

Source: Bureau of Labor Statistics; calculations by the Institute for Economic Advancement.

The revision is not entirely negative. Revised data for 2010 will show slightly higher employment than the currently-published numbers. But this tends to exacerbate the negative impact of the revisions on job growth for 2011. Currently-published data show job growth of 8,000 (0.7%) for the four quarters ending 2011:Q3. The revised data are expected to show a net decline of 3,200 jobs (-0.3%).

The magnitude of the data revisions also vary by sector. As shown in the table below, some sectors are likely to show positive net revisions: Manufacturing and Government, in particular, are expected to be revised upward — each by more than 3,000 jobs. Downward revisions are concentrated in private-sector service-providing sectors, with Business & Professional Services and Leisure & Hospitality Services registering the largest declines. Note that the sum of the estimated component-revisions do not add to the total. Taking the estimated revisions sector-by-sector, the total downard revision is 9,400.

Source: Bureau of Labor Statistics; caluclations by the Institute for Economic Advancement

Whether the total downward revision is 11,000 (as estimated for the total) or 9,400 (as estimated for the sum of super-sector components), the general magnitude of the downward revision is clear. After all the data are in, it looks like employment growth during 2011 will be close to zero. In terms of the slow jobs-recovery from the 2008-09 recession, 2011 is shaping up to be a “lost year” for Arkansas.

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*The projected benchmark series is calculated using some simple statistical procedures to estimate the correspondence between the two measures in the past (Jan. 2001-Dec. 2009) and to forecast that relationship in the more recent past (Jan. 2010-March 2011). For April 2011 through September 2011 (the most recent month availabile for the CES payroll data), month-to-month percent changes are used to extrapolate these estimates forward. Quarterly estimates are then calculated as the average of monthly figures.

Metro Area Unemployment – September 2011

by Michael Pakko
Employment/Unemployment, Metro Areas (MSAs)
November 3, 2011

Yesterday, the September figures for employment and unemployment were released by the Bureau of Labor Statistics. The not-seasonally-adjusted data for Arkansas metro areas show that unemployment was higher in September of 2011 than in September of 2010 everywhere except Hot Springs. On a month-to-month basis, unemployment rates were down across the state; however, this drop represents part of the typical seasonal effect that is seen in August and September — when the students are back to school and teachers are back to work. After seasonal adjustment, the change in unemployment rates from August to September was postive in each of Arkansas MSAs.

As shown in the chart below, there is a clear trend emerging for 2011. After some improvement in 2010, unemployment rates have been rising for several months now. Higher rates of unemployment are emerging in nearly every area of the state, and the magnitudes of increase rates have been substantial: Since February, unemployment rates are up more than a percentage point in Fayetteville, Little Rock and Pine Bluff.

Source: Bureau of Labor Statistics; Seasonally adjusted by the Institute for Economic Advancement.

Arkansas Employment and Unemployment – September 2011

by Michael Pakko
Employment/Unemployment, General Information
October 21, 2011

The September employment report from the U.S. Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) showed that Arkansas’ unemployment rate remained unchanged at 8.3% last month. Following four consecutive monthly increases, the unchanged unemployment rate represents something of an improvement over recent labor market performance. In fact, the household survey data showed that the number of employed rose by 3,256, the first increase in the past six months. The number of unemployed rose by only 362, far below the average rate of change over the previous four months (1,578 was the average increase in unemployment for May-August).

The recent relative weakness in Arkansas job markets is indicated by unemployment-rate changes over the past year. According to the BLS report, Arkansas is one of only 10 states that have seen an increase in the unemployment rate over the past 12 months. A total of 38 states have seen unemployment rate declines over the past year, with 2 states unchanged.

Data from the payroll survey does little to add any optimism to the assessment of Arkansas labor market conditions. DWS reported an employment increase of more than 10,000 jobs for the month, but also pointed out that many of the gains were attributable to seasonal, back-to-school effects. This was particularly evident in the State and Local Government sectors, but was also a factor for Education and Health Services. As shown in the table below, seasonally adjusted data showed a total net decline in September of approximately 1,600 jobs. Government employment and Education and Health Services showed increases, even after accounting for regular back-to-school effects. But substantial job losses were evident in Trade, Transportation, and Utilities; and in Leisure and Hospitality Services. Manufacturing employment was also down sharply. One bright spot was Construction employment, which has been stagnant since the beginning of the general economic recovery but increased by 1,800 in September. In spite of job losses over the past five months (-9,000 since April), total employment is up by 2,300 since the end of 2010, and is up by 10,600 over the past twelve months.

The payroll survey data for September was the fourth decline in the past 5 months. As shown in the chart below recent declines have erased some of the gains we saw in late 2010 and early 2011. In fact, total nonfarm payroll employment in September was slightly below the level recorded in November 2010.

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*Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, are available here: Table – Seasonally Adjusted NFPE

Arkansas Employment and Unemployment – August 2011

by Michael Pakko
Employment/Unemployment, Seasonal adjustment
September 16, 2011

The Arkansas unemployment rate rose for the fourth consecutive month in August, up one-tenth of a percent to 8.3%. According to the Bureau of Labor Statistics (BLS), Arkansas was one of 26 states that saw a rise in the unemployment rate in August. The statistics from the household survey showed that the number of employed was down 3,148 while the number of unemployed was up by 1,193.

As shown in the figure below, the unemployment rate in Arkansas has been trending upward since the beginning of the year. For most of the recession and recovery period, Arkansas unemployment rate was 2 percentage points below the unemployment rate for the U.S. It has now crept up to within 0.8 percentage points of the the national average.

The payroll survey was also disappointing. Seasonally adjusted data for August showed a decline of 1,900 jobs, on top of a downward revision to the July data. After peaking in April, payroll employment has declined by 7,000 jobs in the past four months. The table below shows that job losses in August were widespread. The only sectors that showed positive monthly growth were Government (+3,000 jobs) and Manufacturing (+400). Losses were particularly sharp in Professional and Business Services (-1,700) and Construction (-1,900). Employment in construction had shown a sharp increase in July, but the August figures erased that gain.

It is never advisable to put too much emphasis on one month’s data, or on any one particular statistic. But today’s employment report is the fourth consecutive report indicating weakness in Arkansas’ job market. Data from both the household survey and and payroll survey suggest that conditions have deteriorated markedly since April.

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Metro Area Employment and Unemployment – July 2011

by Michael Pakko
Employment/Unemployment, General Information, Metro Areas (MSAs), Seasonal adjustment
August 31, 2011

As previously reported, the statewide unemployment rate rose slightly in July, from 8.1% to 8.2% (seasonally adjusted). New data released this morning shows that most of Arkansas’ Metropolitan Statistical Areas (MSAs) experienced stable or lower unemployment rates. As shown in the table below, not-seasonally-adjusted unemployment rates declined in all of the state’s MSAs except for Texarkana. Unemployment tends to be higher during the summer months, reflecting the impact of summer vacation for school employees and students. There is typically a very slight drop in unemployment rates between June and July. After accounting for these seasonal regularities, seasonally adjusted figures show unemployment rates declining in Hot Springs, Jonesboro, Little Rock, Memphis, and Pine Bluff. Texarkana saw a small uptick in unemployment, while rates in Fayetteville and Fort Smith were unchanged.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

The Bureau of Labor Statistics reported that unemployment rates in July were lower than a year earlier in 257 of the nation’s 372 MSAs, higher in 94, and unchanged in 21. Here in Arkansas, only Hot Springs shows a lower unemployment rate than in July 2010.

The figures for nonfarm payroll employment in Arkansas’ MSAs show mixed results for July: Compared to the previous month, employment declined in Fayetteville, Fort Smith and Texarkana. Increases were recorded for Pine Bluff, Memphis, and Hot Springs. The payroll data for Hot Springs have been particularly volatile in recent months, but as of the most recent observation, Hot Springs employment is 7.3% higher than a year ago, 7.8% higher than the employment trough of February 2010, and 2.6% higher than at the start of the 2008-09 recession. Jonesboro also shows gains over all of those time-horizons, with employment up 1.0% since the start of the recession.

Arkansas Employment and Unemployment – July 2011

by Michael Pakko
Employment/Unemployment, General Information, Seasonal adjustment
August 19, 2011

The unemployment rate in Arkansas rose again in July, reaching a new cyclical high of 8.2% (up from 8.1% in June). The latest data from the Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) indicated that the number of Arkansans unemployed rose for the third straight month, up 1,400 in July following a cumulative increase of 3,600 in May and June. The household survey also showed a decline in the number of those employed, down 7,400.

The employment data from the household survey have been showing a downward trend since March, falling by a total of nearly 25,000. However, the establishment survey (which is based on reports from employers) shows a slowdown, but with net positive growth since the beginning of the year. As illustrated in the figure below, employment measured by the payroll survey has been growing–albeit irregularly–since February 2010. But since March, net growth in payroll employment has been virtually zero (-0.02%).

The payroll data for July shows a slight uptick in employment, rising by 600 jobs from the revised level in June (seasonally adjusted). As shown in the table below, employment declines were registered in some key sectors for the Arkansas economy, including Manufacturing; Trade, Transportation, & Utilities; and Professional & Business Services. Employment in Leisure & Hospitality Services and Education & Health Services expanded. In a surprising break from its sluggish recent trend, construction employment rose sharply in July. Looking at job growth since then end of 2010, only one sector (Manufacturing) has shown negative net growth. Led by gains in the service providing sectors, total payroll employment has increased by 7,100 jobs during 2011.

The seasonally adjusted data from the BLS summarized in the table above is quite a bit different than the not seasonally adjusted data in the press release from DWS. Before seasonally adjustment, the Arkansas payroll employment was down by 15,600 jobs. Most of this decline was registered in the category of Local Government (-13,200), reflecting the seasonal decline in employment in the state’s public schools. The not-seasonally-adjusted data also show a larger decline in Professional & Business Services.

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*Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the monthly press release from the Arkansas Department of Workforce Services, are available here: Table – Seasonally Adjusted NFPE

Metro Area Employment Summary – 2011:Q2

by Michael Pakko
Employment/Unemployment, Metro Areas (MSAs)
August 3, 2011

The latest data on employment and unemployment for Arkansas’ metro areas indicates that unemployment rates have been increasing across the state. This morning’s news release from the Bureau of Labor Statistics reported that “unemployment rates were lower in June than a year earlier in 224 of the 372 metropolitan areas…” Unfortunately, none of Arkansas’ metro areas were included in that total. In fact, unemployment rates in Arkansas have increased across the board during the second quarter of 2011.

On a month-to-month basis, some of the June unemployment rates reported today jumped substantially higher than May. However, higher unemployment in June is a recurring seasonal phenomenon. After adjusting for seasonality, the increases in unemployment rates were more modest — but they were increases, nonetheless. The June jump in unemployment was largest in Fort Smith (+0.5 percentage points), but was also substantial in Fayetteville, Hot Springs, and Pine Bluff (+0.3 percentage points each). Unemployment in the Little Rock MSA was essentially unchanged.

When the statewide data was released, we noted that June’s payroll survey indicated somewhat greater strength in labor markets than did the household survey. The same is true of the metro area data. Nonfarm payroll employment declined in four of the state’s MSAs, but increased in three. Hot Springs showed a particularly large drop in payroll employment in June. However, this only partly offset substantial increases registered in April and May. Compared to a year ago, employment in both Hot Springs and Texarkana are up more than one percent.

Relative to the statewide trough in employment registered in February 2010, all but one of Arkansas’ MSAs have shown positive growth. Employment in Pine Bluff remains 2.2% below the level of February 2010, but is slightly above a low-point registered in February 2011. Compared to the start of the recession, employment changes range from down 6.3% in Fort Smith to essentially unchanged in Jonesboro.

Arkansas Employment and Unemployment – June 2011

by Michael Pakko
Employment/Unemployment, General Information
July 22, 2011

According to new data from the Bureau of Labor Statistics and the Arkansas Department of Workforce Services (DWS), the unemployment rate in Arkansas rose by 0.3 percentage points in June, from 7.8% to 8.1%. The Arkansas unemployment rate is now higher than it has been at any time during the recession and recovery. The household survey reported an increase in the number of unemployed by over 2,500 and a decline in the number of employed by approximately 11,000. At 109,000, the number of unemployed in Arkansas is now at a new all-time high. As shown in the chart below, recent increases in the Arkansas unemployment rate have been following the national trend, although the rate is still more than one percentage point lower in Arkansas than the national average.

The news from this morning’s report was not all bad, however. This is one of those occasions when the independent payroll survey provides a different picture than the household survey. According to the payroll report, employment was up by 2,100 in June (seasonally adjusted), with the May number revised upward slightly as well. Since the trough of February 2010, nonfarm payroll employment in Arkansas has increased by 27,600. That increase represents approximately 47% of the jobs lost from the start of the recession until February 2010.

As shown in the table below, employment gains were concentrated in the service-providing sectors, particularly Education & Health Services and Professional & Business Services. The crucial sectors of Manufacturing and Trade, Transportation & Utilities showed rather substantial losses for the month. Employment in the construction sector showed a welcome increase. Nevertheless, employment in both Construction and Manufacturing are down for the first six months of the year.

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Quarterly Census of Employment and Wages – 2010:Q4

by Michael Pakko
Employment/Unemployment, General Information
July 6, 2011

Last week, the Bureau of Labor Statistics released the latest Quarterly Census of Employment and Wages (QCEW). This is the most detailed and accurate of all the employment measures compiled by the BLS. Data from the QCEW are available for individual counties and industries, and are used in benchmark revisions to bring greater precision to the monthly estimates of the Current Employment Statistics. The most recent data (for the months of 2010:Q4) show positive net employment growth for the year: From 2009:Q4 to 2010:Q4, total employment in Arkansas increased by approximately 7,400 jobs — an increase of 0.65%.

As shown in the map below, employment growth rates varied considerably among counties. Growth rates ranged from a high of 7.6% in Miller County to a low of -10.3% in Little River County. There is no clear geographic pattern to employment growth rates by county, but generally, growth rates tended to be higher in the northern portion of the state. Of the state’s 75 counties, 41 showed positive growth rates while 34 contracted.

Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages

The breakdown of employment growth by industry shows that most of the employment growth during 2010 took place in the service-providing sectors. Professional and Business services (which include temporary employment agencies) posted a growth rate of over 4%. Education and Health services continued its robust growth (+1.4%), and Trade, Transportation, and Utilities made a significant rebound (+1.5%). Both Financial Services and Information Services contracted over the year, but both are relatively small sectors so they did not contribute much to overall job growth.

cqew_industry_2010q4 — Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages

In March 2012, the monthly data from the Current Employment Statistics will be revised using information from the QCEW. In some previous years, these benchmark revisions have been substantial. For example, in early 2010, revised data showed a loss of more than 18,000 jobs in Arkansas that had not been reflected in the monthly CES data for 2009 (see Forecasting a Revision of History). The data released last week indicate that next year’s revisions are likely to be relatively small. Our estimates indicate that the revisions will show somwhat higher employment for the first half of the year, but a downward revision to fourth-quarter data.

Sources: Bureau of Labor Statistics/QCEW, Projections by IEA — Sources: Bureau of Labor Statistics, Projections by IEA

Arkansas Employment and Unemployment – May 2011

The unemployment rate in Arkansas ticked upward in May, rising from 7.7% to 7.8%. According to data from the Bureau of Labor Statistics and the Arkansas Department of Workforce Services (DWS), the household survey showed that the number of unemployed rose by over 1,100 while the number of employed dropped 4,800. This was the second consecutive monthly decline in the number of employed following a string of increases since July 2010. DWS Communications director Kimberly Friedman pointed out that the uptick in the unemployment rate and the decline in the labor force “mirrors the trend seen at the national level.” It is also likely to reflect disruptions due to severe weather conditions in Arkansas during late April and May.

The figures for nonfarm payroll employment from the establishment survey also showed a contraction in the total number of jobs in May, down 5,400 (seasonally adjusted). As shown in the chart below, the May reading fits the recent pattern of month-to-month volatility. From a longer-run perspective, however, the latest monthly observation provides little indication of any change in the trend of positive job growth that has prevailed since February of 2010.

Job losses in May were concentrated in two sectors: Trade, Transportation, and Utilitites (TT&U); and Professional and Business Services (P&B). In the broad TT&U sector, the raw data showed only a slight decline in jobs (-200). However, employment in this sector typically expands during May so the seasonally adjusted figures show a decline of 3,100 — with much of the loss concentrated in Retail Trade (-1,800). In the P&B services sector the number of jobs was down by 2,400 (seasonally adjusted) with the losses concentrated in Administrative & Support Services (-1,700). The Administrative and Support subsector includes temporary positions arranged through employment agencies–so while it has shown some of the largest gains over the past year (+2,900) it is one of the first areas to show job losses in a temporary employment contraction (-1,400 in May).

The tornadoes and flooding that hit many parts of the state during April and May are likely to have suppressed employment growth temporarily, but should have little lasting effect. In fact, recovery efforts are likely to provide some support for job growth in coming months — particularly in the construction sector. Underlying growth trends are also likely to result in a rapid recovery in the Administrative & Support Services sector. The key sector to monitor in June will be TT&U, which accounts for a large share of total employment in Arkansas. If the factors underlying the weak employment report for May are indeed temporary, we should see robust recovery in this sector. Continued stagnation in this sector would be a sign of more fundamental economic weakness.

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