The smoothed seasonally adjusted unemployment rate estimates have been updated by the BLS. As described in a previous post, the smoothed seasonally adjusted (SSA) estimates are processed using an algorithm that incorporates a long-run trend smoothing procedure. Hence, the estimates show less month-to-month variability than data that produced using only seasonal adjustment techniques.
The table below shows that unemployment rates declined in all of Arkansas MSAs in January. The largest monthly declines (-0.4 percentage points) were registered for Fayetteville, Memphis, and Pine Bluff.
Source: Bureau of Labor Statistics
As shown in the figure below, the month-over-month declines in unemployment continue a trend that emerged in the final months of 2011. The recent declines have largely reversed the run-up in unemployment rates that we saw during the summer months.
The latest employment report from the U.S. Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) show that the unemployment rate in Arkansas fell by 0.2 percentage points in January to 7.6%. This was the fourth consecutive monthly decline. The Arkansas unemployment rate is now 0.6 percentage points lower than its (revised) peak of 8.2 in July 2011.
Source: Bureau of Labor Statistics
The underlying details in the January unemployment report support a positive interpretation: The number of employed persons was up by nearly 6000, while the number of unemployed was down almost 2000. As a result, the unemployment rate decline occurred against a backdrop of a substantial expansion of the labor force. Since the unemployment rate peak in July 2011, the number of employed has risen by nearly 24,000 and the number of unemployed is down 6200.
The independent payroll survey showed modest job gains for the month, with increases spread across several sectors. Although the not-seasonally-adjusted data showed a net decline for the month, the job losses were largely seasonal as holiday-related employment declined (particularly in the Retail Trade and Leisure & Hospitality sectors). Seasonally adjusted data showed an increase of 4600 jobs for the month. Goods producing sectors saw an increase of 2300 jobs, with most of the gains in construction. Service providing sectors showing gains included Trade, Transportation & Utilities (+2200), Education & Health (+1700), and Leisure & Hospitality (+1700). These increases were partly offset by notable job-losses in Professional & Business Services (-1100) and Government (-2100).
Source: Bureau of Labor Statistics
Compared to a year ago, the newly-revised payroll data show a net increase of 4300 jobs. Education & Health Services continued to be the strongest-performing sector over the past 12 months, adding 4000 jobs. In contrast, manufacturing employment has fallen by 4600 jobs.
Benchmark Revisions
This monthly report on payroll employment included the annual benchmark revisions to the data. As previously reported, we were anticipating a sharp downward revision to the jobs data for early 2011. As of the new benchmark date (2011:Q1) we expected to see a downward revision of approximately 11,000 jobs. The actual revision was down 10,400. Estimation of new seasonal factors and updated source-data also resulted in a downward revision to the third-quarter statistics. At the end of 2011 (December) total payroll employment is now estimated to have been 1161.3 thousand, down 14.3 thousand from the previously-estimated 1175.6 thousand. The revised data now show that 2011 was a year of negative net employment growth. From December 2010 through December 2011, total payroll employment in Arkansas fell by about 3,100 jobs.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
Next week we’ll see the results of the long-awaited benchmark revisions to payroll employment data for Arkansas. In the meantime, the Bureau of Labor Statistics (BLS) has completed its annual revision of the Local Area Unemployment Statistics (LAUS). Data for the LAUS are based on the same concepts and definitions as the national unemployment rate figures, but are calculated using statistical models that incorporate information from a number of sources. Each year, the BLS revises labor force and unemployment data to incorporate updated population data, other data revisions, and reestimation of statistical models.
The revised figures for Arkansas’ unemployment rate show a slightly different pattern than did the previously-published data. As shown in the figure below, the revised data show that the unemployment rate was higher than previously published from mid-2010 through mid-2011. On the other hand, the unemployment-rate surge that we saw in the latter part of 2011 has been largely revised away. For the month of December 2011, the new data show the rate at 7.8% — slightly higher than the 7.7% that was previously reported.
Source: Bureau of Labor Statistics
Metro Area Unemployment Rates
During 2011, the BLS began publishing smoothed seasonally-adjusted metropolitan area estimates for labor force and unemployment data. The smoothed seasonally adjusted (SSA) estimates are processed using an algorithm that incorporates a long-run trend smoothing procedure. Hence, the estimates show less month-to-month variability than data that is subjected to more conventional seasonal-adjustment techniques. Beginning with the next Metropolitan Area Employment and Unemployment news release, the Arkansas Economist will begin publishing these estimates instead of the figures calculated in-house by the Institute for Economic Advancement.
Comparing the chart below to the most recent analysis of metro area unemployment rates, the overall pattern of unemployment-rate movements is basically the same but with somewhat lower volatility. Because the smoothing procedure reduces the magnitude of month-to-month changes, the SSA data ended the year showing higher unemployment-rate levels than a simple seasonal adjustment technique. (That is, some of the rapid decline in unemployment rates that occurred in the last three months of the year is treated as transitory by the smoothing algorithm.) The SSA data make for less dramatic headlines — rather, they provide a more measured evaluation of changes in metro area unemployment rates over time.
Unemployment rates in Arkansas Metropolitan Statistical Areas (MSAs) declined in December — the third consecutive month of across-the-board reductions in jobless rates (seasonally-adjusted). Previously-released statewide data showed that the Arkansas unemployment rate fell from 8.3 percent in September to 7.7 percent in December. Rates in Arkansas metro areas showed even sharper declines over the three-month period–ranging from 0.7 percentage points in Hot Springs to 1.7 percent in the Memphis MSA.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
As shown in the table below, the raw data from the Bureau of Labor Statistics showed unemployment rates rising from November to December. However, these increases were entirely seasonal in nature. After seasonal adjustment, the monthly change in unemployment rates was negative for every MSA except Texarkana, where the rate was unchanged at 7.1%. The end-of-year declines in unemployment bring Arkansas metro areas back into the set of MSAs with unemployment rates lower than a year earlier. According to the BLS press release this morning, 329 of the nation’s 372 metro areas fell into this category in December.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
Independent data on nonfarm payroll employment was not as unambiguously positive as the household unemployment data. Employment was up in 5 MSAs, but declined in Hot Springs, Jonesboro and Fort Smith. Since statewide employment reached a low-point in February 2010, most of the state’s MSAs have seen positive employment growth. However, Fort Smith and Pine Bluff have continued to experience job losses. Compared to the start of the recession in December 2007, only Hot Springs has seen net positive job growth.
The Arkansas unemployment rate declined to 7.7% in December, down from a revised 7.9% rate in November. Over the last two months of the year, the number of unemployed declined by 6,469 and the number employed rose by 16,190. Accordingly, the sharp drop in the unemployment rate has taken place in the context of an expanding labor force. Since Spring of 2011, we had seen the labor force participation rate decline sharply as the unemployment rate rose. In the final months of year we’ve seen that trend almost completely reversed and we’re now right about where we were before the summer doldrums hit the Arkansas employment market.
Source: Bureau of Labor Statistics
The improvement in unemployment indicated by the household survey suggests that the temporary weakness we saw during 2011 has abated. But there is still reason to be cautious about the outlook for 2012. In the independent payroll survey released as part of today’s report, total employment for the month declined slightly from the previous month (-500, seasonally adjusted). Moreover, the employment total for November was revised down by 1,600. For the two months together, payroll employment was up by 5,000. However, total employment remains below a peak reached in April 2011.
Source: Bureau of Labor Statistics
The December decline in payroll employment was spread across service-providing sectors. One notable exception was Trade, Transportation and Utilities, which showed an increase of 1,900 jobs for the month. Nevertheless, TT&U employment remains 4,800 jobs below the April 2011 peak. Other sectors that continue to lag well below their levels of last spring include Manufacturing and Professional & Business Services.
Source: Bureau of Labor Statistics
Compared to a year ago (December 2010), total payroll employment is up by 8,000. However, the next monthly report (Scheduled for March 13), will include annual benchark revisions to the payroll data. As discussed in a previous post, the data revisions are likely to result in a sharp downward revision to the payroll figures for early 2011. As a result, we are likely to see the year-over-year employment gains revised away in light of updated, more accurate data.
Unemployment rates in Arkansas metro areas fell sharply in November, adding to declines registered in October. The newest data, released this morning by the Bureau of Labor Statistics, show unemployment rates down in each of the Metropolitan Statistical Areas (MSAs) that include parts of Arkansas. The raw data (which are not seasonally adjusted) generally understate the magnitude of the declines. After seasonal adjustment, the declines in November ranged from -0.2% in Fort Smith to -0.9% in Memphis. For the two months of October and November, unemployment rates were down by at least one-half of a percentage point in all eight MSAs.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
After experiencing rising unemployment rates over the first half of 2011, the recent declines leave unemployment lower than the previous year in every MSA except Pine Bluff, where the unemployment rate was unchanged from November 2010.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
The unemployment rate in Arkansas fell by two-tenths of a percent to 8.0% November. According to data from the Bureau of Labor Statistics (BLS) and the Department of Workforce Services (DWS), the number of unemployed Arkansans declined by 3,219. The household survey also showed an increase of nearly 10,000 employed, so the unemployment rate declined in the context of a sharp increase in the labor force.
Source: Bureau of Labor Statistics
The independent payroll survey also showed a significant increase in employment. Total nonfarm payrolls increased by 7,100 for the month, a gain of 0.6% (seasonally adjusted*). According to the press release from the BLS, this was the second-largest over-the-month percentage increase in the nation (employment in South Carolina increased by 0.9%). As shown in the table below, gains were prominent in service-providing sectors — particularly Professional & Business Services (+2,500) and Education & Health Services (+2,000). Gains in Retail Trade employment also boosted the Trade, Transportation & Utilities category, which increased by 1,100 jobs. The November data also showed a sharp increase in Manufacturing employment (+1,400).
Source: Bureau of Labor Statistics
Since peaking in April 2011, employment in Arkansas had been on the decline for much of the year. The November increase (on top of a revised 1,200 job gain in October) represents a welcome reversal of that trend. On net, however, employment remains 1,200 below the April peak. Compared to the trough registered in February 2010, employment in Arkansas has increased by 29,400. Nevertheless, the total number of jobs remains 29,100 below the level recorded at the start of the recession in December 2007.
The unemployment rate in Arkansas dropped one tenth of a percentage point to 8.2 percent in October. According to data from the Bureau of Labor Statistics (BLS) and the Department of Workforce Services (DWS), the number of unemployed Arkansans fell by 663 (seasonally adjusted), the first monthly decline since May. The data from the household survey also showed that the number of employed rose by 7,424. Arkansas was one of 36 states to see a drop in the unemployment rate in October, but one of only 8 states with an unemployment rate higher than one year earlier.
Source: Bureau of Labor Statistics
The separate payroll employment report showed an increase of 1,000 jobs for the month (seasonally adjusted). However, total employment in October was down 1,300 from a year earlier, and 8,500 below the recent peak employment recorded in April 2011. Month-to-month changes showed declines in good-producing sectors, with Construction down by 500 and Manufacturing down by 1,500. Employment in Trade, Transportation and Utilities was also down sharply. With the exception of Information Services, all service-sector categories showed increases in October. As noted in the news release from DWS, not-seasonally-adjusted data for Education and Health Services and Local Government showed increases associated with back-to-school effects. Nevertheless, these categories also experienced employment increases after accounting for this recurring seasonal pattern.
Source: Bureau of Labor Statistics
As previously reported on the Arkansas Economist, the payroll data are subject to annual benchmark revisions that will be completed in March 2012. Based on available data from the Quarterly Census of Employment and Wages (QCEW), the benchmark revisions are likely to show sharply lower job growth for the fourth quarter of 2010 and the first quarter of 2011. Consequently, the total level of employment for all subsequent months (including October) are likely to be revised downward by about 10,000 jobs (+/- 2,000).
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).
Source: Bureau of Labor Statistics
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.
Source: Bureau of Labor Statistics
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.
As previously reported, the unemployment rate for the state ticked up one-tenth of a percent in August, so it might appear anomalous that data released this morning by the Bureau of Labor Statistics and Arkansas Workforce Services shows that unemployment rates in each of the state’s metro areas dropped for the month. The discrepancy is due to the fact that state-level data are seasonally adjusted, whereas the metro area data are reported on a not-seasonally-adjusted basis. After applying simple statistical procedures for seasonal adjustment, however, unemployment rates in the state’s metro areas generally rose in August — consistent with the statewide data. (One important seasonal factor affecting unemployment rates in August is the return of teachers to work and students to school. This tends to lower measured unemployment, but says little about the underlying state of labor markets. Seasonal adjustment accounts for this recurring pattern.)
As shown in the table below, seasonally-adjusted unemployment rates in August were higher than July in all but two of the state’s Metropolitan Statistical Areas (MSAs). Memphis was unchanged at 10.2% and Texarkana’s rate ticked down from 7.9% to 7.8%. Unemployment rates in Fayetteville, Hot Springs, and Jonesboro rose by 0.3%, with smaller increases in Fort Smith, Little Rock and Pine Bluff.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
Seasonally adjusted unemployment rates had been declining during the latter part of 2010, but have clearly been on a rising trajectory since the beginning of this year. Over the past year and a half, Pine Bluff and Memphis have maintained the highest unemployment rates in the state, Fayetteville and Little Rock the lowest rates, with the state’s other MSA’s clustered near the statewide average.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
Data from the separate payroll survey reinforces the weakness indicated by the unemployment figures. From July to August, payroll employment declined in all of Arkansas’ MSAs except Hot Springs. Compared to a year ago, employment has declined in Fayetteville, Jonesboro, Little Rock, Pine Bluff, and Texarkana. Since the statewide employment trough in February 2010, however, most of the states metro areas still show positive net job growth. Only Memphis and Pine Bluff had lower employment in August 2011 than in February 2010. Compared to the start of the recession, employment in Hot Springs is up by 4.1%, but is lower in all of the other MSAs — ranging from -0.8% in Jonesboro to -8.4% in Memphis.
