Arkansas jobless rate falls to 7.5% in June

— Arkansas’ unemployment rate fell to 7.5 percent in June from 7.7 percent in May, the lowest rate since October, the U.S. Bureau of Labor Statistics said Tuesday.

Arkansas’ rate is the 17thlowest in the country and is well below the national rate of 9.5 percent.

The report is encouraging, said Michael Pakko, state economic forecaster for the Institute for Economic Advancement at the University of Arkansas at Little Rock.

“The unemployment rate falling 0.2 percent is definitely good news,” Pakko said.

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said the state’s economy and unemployment are following national trends.

“As the employment situation improves marginally at the national level, we see it improve marginally here,” Deck said.

The number of nonfarm jobs in Arkansas grew by 3,400 from May to June, the Arkansas Department of Workforce Services said. The growth in jobs of 0.5 percent was the third highest in the country, behind Montana at 1 percent and Alaska at 0.9 percent, the federal bureau said.

Surprisingly, much of Arkansas’ employment gains seem to be occurring outside the state’s metropolitan areas, Deck said.

“That is consistent with a more expansionary economy,” she said.

In the depths of the recession, rural areas suffered disproportionately, Deck said.

A lot of the gains in June employment were in manufacturing, which had 3,500 more jobs compared with June of last year, Deck said.

“And a lot of the manufacturing in the state is away from core metro areas,” Deck said.

Deck emphasized that the improvement for rural areas concerns only one month’s data. It is also possible that the June employment statistics could be revised next month, Deck said.

Arkansas’ labor force shrank to 1,352,800, dropping by 8,200 compared with May, the Bureau of Labor Statistics reported.

The unemployment rate is calculated by dividing the labor force by the number of unemployed. The labor force decline in June was twice as big as the decline in the unemployed that month.

The labor force has dropped by 24,300 people in four months, since it was at 1,377,100 in February, Pakko said.

There are several reasons the labor force might decline - people retiring, moving out of state or becoming discouraged and ceasing to seek work, Pakko said.

“The most obvious reason though is growth in discouraged workers,” Pakko said. “The overall report should give encouragement to those people, with the number of unemployed declining by more than 4,000.”

Nevada had the highest unemployment rate in the country at 14.2 percent, followed by Michigan at 13.2 percent, California at 12.3 percent, Rhode Island at 12.0 percent and Florida at 11.4 percent.

North Dakota had the lowest joblessness rate at 3.6 percent, followed by South Dakota at 4.5 percent, Nebraska at 4.8 percent, New Hampshire at 5.9 percent and Vermont at 6 percent.

There were six Arkansas employment sectors that reported declines in jobs in the past year, and five, including manufacturing, that had job gains.

There was a decline of 5,000 jobs in the trade, transportation and utilities sector since June of last year, primarily because retail trade and the transportation, warehousing and utilities category has been hit hard, the Department of Workforce Services said.

The professional and business services sector lost 2,900 jobs, with 2,000 in the professional, scientific and technical category.

The leisure and hospitality sector fell by 2,700 jobs, with almost all of the decline coming in the accommodations and food services sector.

Information lost 1,700 jobs. Financial activities and the mining and logging sector each lost 600 jobs.

The biggest gain in jobs since June of last year was in the educational and health services sector, which grew by 6,700 jobs. Social assistance, which includes activities such as vocational rehabilitation and child day-care services, accounted for 3,000 of those jobs, the Department of Workforce Services said.

There were 5,200 new government jobs, all in federal and state government.

Construction added 1,600 jobs and “other services” grew by 1,000 jobs.

Business, Pages 25 on 07/21/2010

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