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Metro Area Employment & Unemployment – June 2012

The Bureau of Labor Statistics reported today that unemployment rates in June were lower than a year earlier in 328 of the nation’s 372 metropolitan areas.  In Arkansas, unemployment rates were down sharply in every metro area.  The smallest decline was for Little Rock, down 0.9%.  The unemployment rate in Pine Bluff was down 1.7% from June 2011.

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

Typically, month-to-month changes in the not-seasonally-adjusted unemployment rate data are dominated by predictable seasonal movements.  But the May-June seasonal effect is rather small, so the smoothed seasonally adjusted estimates for metro area unemployment rates this month are very close to the unadjusted data.  As shown in the table below, unemployment rates declined in 6 of the 8 metro areas.  Unemployment in Fort Smith was unchanged, and the rate ticked up one-tenth in Memphis.

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

Payroll Employment

Statewide data released on July 20 showed a monthly decline for Arkansas, down 4,300 jobs (-0.4%), but today’s data showed employment increase in all 8 of the state’s metro areas.  Employment in the Little Rock metro area was essentially unchanged, but for some MSAs the increases were substantial:  Jonesboro, Texarkana, and Pine Bluff all saw monthly increases exceeding one full percentage point.

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

The apparent disconnect between metro-area employment gains and statewide employment losses in June has several possible explanations.  It may be the case that most of the job losses took place in the non-metro area of the state, offsetting the metro-area gains.  Another possibility is that metro area job increases are taking place largely in the non-Arkansas counties within those areas, with counties on the Arkansas side of the border lagging.   Then again, it could just be a statistical anomaly due to sampling error or some other data discrepancy.  Unless the divergence between metro and state employment trends persists, however, it should not be a cause for great concern.

With the June payroll numbers now available, we can take a step back and consider the the longer-run trends using quarterly-average data.  The chart below shows quarterly payroll employment for Arkansas metro areas, using the peak of the previous economic expansion (2007:Q4) as a common starting point.  Texarkana, Jonesboro and Fayetteville now have higher levels of employment than before the recession.  Little Rock remains about 3% below the previous cyclical peak, with the other metro areas in the state lagging further behind.  Fort Smith, where employment has experienced a cumulative decline of about 13%, saw a welcome upturn in employment during the second quarter.

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

Arkansas Employment and Unemployment – June 2012

The unemployment rate in Arkansas ticked downward from 7.3% in May to 7.2% in June.  According to the report from the Bureau of Labor Statistics (BLS), Arkansas was one of only 11 states to see a declining unemployment rate for the month.  Twenty-seven states recorded increases, and 12 states had no change.  The number of unemployed Arkansans declined by 1,884, falling to 99,185.  This was the first time Arkansas unemployment has fallen below 100,000 since February 2009.

The news from the household survey was not entirely positive, however.  The number of employed declined by 2,369 in June after showing essentially no change in the previous month.  As a result, the Arkansas labor force contracted by 4,253 — the first monthly downturn since July 2011.  Over the past several months, the combination of declining unemployment and an expanding labor force had distinguished Arkansas as one of the states where labor markets seemed to be outperforming the national average.

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

Data from the employer survey confirmed the weakness in employment growth for the month.  Nonfarm payrolls were down 4,300 from the previous month (seasonally adjusted).  Most sectors of the economy experienced job losses, with the notable exception of Education & Health Services, which saw an increase of 2,000 jobs.  Leisure & Hospitality Services, Financial Services, and Wholesale trade also showed slight increases.

On a year-over-year basis, the seasonally adjusted figures show a net increase of 6,900 jobs since June 2011, with gains concentrated in Education & Health Services, and Leisure & Hospitality Services.  Employment in goods-producing sectors continues to languish:  Construction employment was down 3,000 from the previous year, and Manufacturing employment was down by 1,800.

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

As recently reported here at the Arkansas Economist, the latest data from the Quarterly Census of Employment and Wages (QCEW) seems to be indicating that the payroll employment data will eventually be revised upward.  Specifically, the QCEW data show must stronger job growth in the latter part of 2011 than current employment reports have indicated.  If we take these likely revisions into account, payroll employment from June 2011 through June 2012 has expanded by over 16,000 instead of the 6,900 implied by today’s report.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

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*Seasonally adjusted data for Arkansas 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.

Employment in Arkansas – Reconciling the Accounts

Over the past several months, the Arkansas employment reports have been providing mixed signals.  On the one hand, the unemployment rate has declined dramatically as household employment has risen.  Meanwhile, the payroll employment statistics have shown rather sluggish growth rates.  The chart below compares these two measures of employment.  Although they are compiled from different surveys and measure slightly different concept of employment, the overall patterns of the two series are quite similar.*  The difference between growth rates over the past several months is apparent, however.  From May 2011 through May 2012, household employment has increased by 2.6% while payroll employment has gained only 0.6%.

Source: Bureau of Labor Statistics

A third data source helps to reconcile these two divergent series.  The Quarterly Census of Employment and Wages (QCEW) represents a more comprehensive and accurate version of the payroll employment statistics.  In fact, the statistics from the QCEW represent the source-data for annual revisions of the payroll employment figures.  These revisions are often substantial (see here and here, for example).

Although we are still a long way from the annual revisions, the latest data from the QCEW already suggest that there will be large revisions to payroll employment statistics for the second half of 2011.  Using some simple statistical techniques to estimate the magnitude of the eventual data revisions, it appears that cumulative revisions to the end of 2011 will result in an employment level more than 11,000 higher than currently-published statistics.  The upward revision for October alone is expected to be more than 18,000.  As shown in figure below, the anticipated revision will raise the growth profile of payroll employment substantially.  With these estimated revisions included, payroll employment growth from May 2010 to May 2011 amounts to 1.5%, narrowing the observed gap between houshold and payroll employment growth.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Because the actual benchmark revision will use QCEW data through the first quarter of 2012, the magnitude of the ultimate payroll data revision may end up being even larger.  What we can say for sure at this point is this:  The relatively weak growth of payroll employment observed over the past year is largely the result of preliminary data that under-measure the true extent of Arkansas employment growth.

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*The household employment statistics are based on survey measures and local economic models, and are compiled under the Local Area Unemployment Statistics (LAUS) program.  The payroll data are based on a survey of firms, and are published as part of the Current Employment Statistics (CES) program.

County Employment and Wages – 2011

This morning, the Bureau of Labor Statistics (BLS) released the latest information from the Quarterly Census of Employment and Wages (QCEW), covering the final quarter of 2011.  Although it is not as timely as the monthly employment statistics that are published under the Current Employment Statistics (CES) program, the QCEW report is more detailed and considered to be far more accurate.  One main attraction of the QCEW is that it presents employment and wage statistics for individual counties.  For the 75 counties of Arkansas, today’s report shows a fairly wide range of labor-market conditions across the state.

For employment growth, the QCEW shows a statewide growth rate of +1.0% from the fourth quarter of 2010 through the fourth quarter of 2011.  As shown in the map below, county employment growth rates ranged from -11.0% in Calhoun County to +11.2% in Hot Spring County.  The highest-growth counties are scattered around the state, but tend to cluster near the four corners of Arkansas.  Slower growing counties are concentrated in the south-central and north-central portions of the state.   A total of 30 counties experinced declines in employment and 44 showed positive growth.  Employment in Lawrence County was unchanged.

Mapping services provided by the GIS Applications Laboratory at the Institute for Economic Advancement.

Today’s report also included information on average weekly wages.  The statewide figures showed a decline of 1.2% for the year.  Growth rates for individual counties ranged from -13.9% in Bradley County to +21.4% in Stone County.  No clear pattern of wage changes is evident across the state, but many of the counties that saw positive wage growth are in the northern part of the state (although a handful of counties in the south and southwest also showed wage gains).  Nearly all of the counties across the center of the state (from Sebastian County in the east to Mississippi County in the west) experienced declining wages.  In all, 52 counties saw negative wage growth, 21 had postive growth rates, and wages in two counties (Hempstead and Newton) were unchanged.

Mapping services provided by the GIS Applications Laboratory at the Institute for Economic Advancement.

Regular readers of the Arkansas Economist will recall that data from the QCEW are used in the annual benchmark revisions of the Current Employment Statistics (the regular monthly reports on state and metro-area payroll employment).  Although the annual revisions will not be released until March of 2013 — and will incorporate information from the 2012:Q1 QCEW report — the information published today suggests that the next revision will (once again) be substantial.  Stay tuned for more information on that topic in the coming days.

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Note:  PDF files of the maps presented above are available here:   Covered Employment Growth,   Average Weekly Wages .

Arkansas Employment & Unemployment in May: No Change

New data from the U.S. Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) show that the unemployment rate ticked up one-tenth of a percentage point in May.  However, it would be more accurate to say the the rate was unchanged for the month:  Calculated out to the second decimal point, the unemployment rate rose from 7.24% to 7.27% — not nearly enough to be considered statistically significant.  Changes in the number of employed (-52) and unemployed (+329) were far too small to be considered meaningful in any quantitative sense.  Since hitting a high-point in July 2011, the number of unemployed in Arkansas is down by more than 10,000 and the number of employed is up by nearly 36,000.

Source: Bureau of Labor Statistics

The statistics on Arkansas nonfarm payroll employment in May can be similarly characterized:  weak, but not significantly so.  For the month, total nonfarm payroll jobs were down by 1,000 (seasonally adjusted).  Meanwhile, the data for April were revised up by 1,400 jobs, so today’s statistics actually show a net increase compared to last month’s reported figures.  Compared to May 2011, the payroll report showed a gain of 6,500 jobs.  After briefly rising above 1.17 million jobs in June of 2010 and again in April 2011, this month’s report is the first since the recession to show two consecutive months above that threshold.

Source: Bureau of Labor Statistics

Sectors losing jobs in May included Retail Trade (-2,700), Leisure & Hospitality Services (-700), and Construction (-500).  Sectors gaining jobs included Professional & Business Services (+1,400), Manufacturing (+1,100),  and Government (+900).  The increase in Government employment was almost exclusively in the category of Local Government.  Compared to May 2011, employment is down in several sectors, including Construction, Manufacturing, Retail Trade, Financial Services and Professional & Business Services.  The year-over-year total job growth has been concentrated in the service sectors of Education & Health, Leisure and Hospitality, and Government (especially Local Government).  From the start of the recession in December 2007, total employment in Arkansas is still down by over 37,000 jobs.

Source: Bureau of Labor Statistics

After two months of relatively weak employment reports on the national level, it is not surprising that the data for Arkansas employment in May are disappointing.  Nevertheless, the statistics do not indicate a downturn in the state’s labor market conditions;  Rather, they appear to represent a brief stalling of the upward momentum we’ve seen over the past several months.

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*Seasonally adjusted data for Arkansas 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.

Labor Force Participation

Last Friday’s employment report suggested a contrast between the underlying statistics driving the Arkansas and U.S. unemployment rates.  In particular, the national unemployment rate fell in April but this was at least partly attributable to a decline in the size of the labor force.  Analysts were quick to point out that this phenomenon did not represent positive economic news (see, for example, the Washington Post article:  “Jobs report shows effects of the incredible shrinking U.S. labor force“).  However, the April decline in Arkansas’ unemployment rate took place in the context of an increase in the state’s labor force.   Quoted in the Arkansas Democrat-Gazette, I commented that “we’re seeing the labor force expanding and the employment market is able to absorb those new workers.”

The contrast between the labor force movements in Arkansas and the U.S. reflects more than just a single month’s data:  recent trends in labor force participation rates show distinctly different patterns over the past 9 months.  From July 2011 through April 2012, the unemployment rates for Arkansas and the U.S. both declined by one full percentage point.  But as shown in the chart below, Arkansas labor force participation rate rose from 60.6% to 61.3%, while the U.S. participation rate declined from 64.0% to 63.6%.

Source: Bureau of Labor Statistics

The increase in labor force participation in Arkansas appears to represent a long-awaited reversal of the recessionary decline.  For the U.S., however, the participation rate shows no sign of departing from the downward trend it has followed since the beginning of the recession.

A closely-related measure — the employment/population ratio — reveals another perspective on the difference between labor-market conditions in Arkansas and the U.S. as a whole.  As shown in the chart below, the U.S. employment/population ratio has been flat throughout the period of economic recovery.  Recent gains in nationwide employment have kept pace with population growth, leaving the ratio little-changed.  In Arkansas, however, recent employment growth has outpaced population growth, leading to a higher proportion of the potential workforce with jobs.

Source: Bureau of Labor Statistics

These statistics are not definitive — they are subject to a fairly wide range of uncertainty and are subject to future revision.  Taken at face-value, however, the labor-force participation rate and employment/population ratio provide evidence to support the conclusion that Arkansas’ falling unemployment rate truly reflects improvement in the state’s labor-market conditions.

Arkansas Employment and Unemployment – April 2012

The unemployment rate in Arkansas declined another two-tenths of a percent in April, dropping to 7.2%.  When the U.S. unemployment rate was reported to have fallen in April, many commentators pointed out that the drop was associated with a decline in the labor force.  In Arkansas, however, the underlying statistics are more positive:  The number of unemployed persons declined by 2,800 and the number of employed rose by nearly 3,300, so the labor force increased by almost 500.  April marks the 9th consecutive month in which both the number of employed and the labor force increased, and the number of unemployed decreased.

Source: Bureau of Labor Statistics

The independent report on nonfarm payroll employment also conveyed good news for Arkansas.  Seasonally adjusted data show that employment increased by 5,500 in April, bringing total employment almost back to the peak level observed in April 2011.

Source: Bureau of Labor Statistics

Employment gains were evident in several sectors of the Arkansas economy.  Gains were particularly strong in Education & Health Services and Leisure & Hospitality Services.  Employment in Retail Trade also showed a large increase.  Goods producing sectors also expanded, with welcome employment gains in both Construction and Manufacturing.  Compared to the start of the recession in December 2007, total employment in Arkansas is down by 37,500 — largely due to contraction of the manufacturing sector.

Source: Bureau of Labor Statistics

April’s payroll employment increases do not appear to have been spread evenly around the state.   Data for metropolitan statistical areas (MSAs) show month-to-month gains in Fayetteville, Fort Smith, and Jonesboro.  Employment in Texarkana was unchanged, but the state’s other MSA’s showed declines.  Fort Smith has suffered the largest cumulative drop in employment since the start of the recession, so April’s increase of 2,200 jobs (+2.0%) represented a welcome departure from trend.  The addition of 1,400 jobs in Northwest Arkansas (+0.7%) brings total employment for the Fayetteville MSA up to a level slightly higher than at the beginning of the recession.  Jonesboro and Texarkana are the only other two MSAs in Arkansas that have this far acheived that distinction.

Source: Bureau of Labor Statistics

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*Seasonally adjusted data for Arkansas 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.

 

Metro Area Employment – 2012:Q1

Last week’s employment report for Arkansas showed a surprising decline in statewide payroll employment.  After two months of growth totalling 6,700 jobs (+0.6%), nonfarm payrolls declined by 1,900 (-0.2%) in March (seasonally adjusted).  Data for the state’s metropolitan areas shows that only Fayetteville and Jonesboro showed positive growth for the month.  Employment was unchanged in Hot Springs and Pine Bluff.  Declines were registered in Memphis, Little Rock, Texarkana and Fort Smith.  Compared to the previous year, employment is up in most of Arkansas’ MSAs — the exceptions being Little Rock (-0.3%) and Fort Smith (-6.3%).  Compared to the start of the recession in December 2007, both Jonesboro and Texarkana are now in positive territory, with Fayetteville close to the break-even point.

Source: Bureau of Labor Statistics

As shown in the chart below, employment patterns among Arkansas metro areas have shown some dinstinct individual patterns.  All of the state’s MSAs showed sharp declines during the depth of the recession in late-2008 through 2009.  Signs of recovery were generally evident in early 2010, but employment growth rates have diverged considerably since then.  Many parts of the state showed weak or negative employment growth during 2011.  Jonesboro and Texarkana continued to experience positive growth — albeit at slower rates.  Hot Springs saw a surge in job growth during 2011, but the increase appears to have been temporary.  Other areas of the state continue to recover slowly.  The clear exception to the pattern of slow, uneven recovery is Fort Smith:  After suffering an 8% decline in employment in 2008 and 2009, recovery in early 2010 was only partial and temporary.  More recent job losses in the Fort Smith MSA have continued to mount.

Source: Bureau of Labor Statistics

Arkansas Employment and Unemployment – March 2012

The unemployment rate in Arkansas fell to 7.4% in March – down 2-tenths of a percent from the previous month.   The new data from the U.S. Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) showed that the favorable trends that emerged in the household survey late last year are continuing:  The number of unemployed Arkansans fell by 1,900 in March and the number of employed was up by 5,500.  Hence, the unemployment rate declined while the labor force expanded.  March represents the eighth consecutive month in which we’ve seen these trends.  Since July 2011, the number of unemployed is down by approximately 8,000 and the number of employed is up by more than 32,000.

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

Payroll Employment
The separate payroll survey was not as unambiguously positive.  Seasonally adjusted, total nonfarm payroll employment fell slightly in March — down by 1,900 jobs.  The seasonally adjusted data might be distorted this year by the warm winter and early spring.  Construction employment, for example, was up sharply in January and February, but declined by 2,100 in March.  This pattern might simply reflect an unusually early start to the construction season.

In addition to construction, sectoral declines in the payroll employment data were prominent for Professional & Business Services (-1,700) and Government (-900).  On the other hand, employment in the Leisure & Hospitality sector was up by 2,000 in March, and Education & Health Services saw a gain of 1,000.  Those two super-sectors, along with Mining & Logging and Government, are registering more jobs now than at the start of the recession in December 2007.

Source: Bureau of Labor Statistics (Current Employment Statistics)

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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.

 

Metro Area Employment – February 2012

The Bureau of Labor Statistics (BLS) reported this morning that payroll employment in February had increased from the previous year in most of the nation’s metro areas:  “267 metropolitan areas reported over-the-year increases in nonfarm payroll employment, 98 reported decreases, and 7 had no change.”  Here in Arkansas, metro employment was up in only four metro areas (Fayetteville, Little Rock, Memphis, and Texarkana) and it was lower in the other four (Fort Smith, Hot Springs, Jonesboro, and Pine Bluff).

Seasonally adjusted data show that from January to February, employment declined in most of Arkansas’ metro areas.  Hot Springs, in particular, showed a substantial monthly decline.  In contrast, employment was up sharply in Texarkana and also rose in Fayetteville and Memphis.  Since the national and statewide employment trough of February 2010, employment growth rates around the state have diverged remarkably.  Texarkana, Fayetteville, and Memphis have all out-performed the statewide average.  In Hot Springs, rapid employment growth during 2011 has reversed, and is now lower than its level in February 2010.  In Pine Bluff and Fort Smith, employment has continued to decline.  In fact, employment in Fort Smith is now 12.8% lower than at the start of the recession in December 2007.

Source: Bureau of Labor Statistics

The BLS report also noted that unemployment rates in February were down from the previous year in 344 of the nation’s 372 metro areas.  Four of the eight metro areas in Arkansas were included on this list.

Source: Bureau of Labor Statistics

The smoothed seasonally-adjusted unemployment rates for Arkansas MSAs will be available later today.