Jobless Numbers Increase

Unemployment Ticks Up But Remains Low

Local unemployment ticked above 5 percent in December but remains below 2011 numbers.

Northwest Arkansas’ unemployment rate last month was 5.1 percent, according to the U.S. Bureau of Labor Statistics. The rate was up from 4.6 percent in November 2012 but below 5.7 percent in December 2011.

The Metropolitan Statistical Area encompasses Washington, Benton and Madison counties in Arkansas and McDonald County, Mo.

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said you cannot look at slight changes month to month to determine the strength of the economy.

“When you compare the numbers to last year you see a positive trend,” she said. “We still have 1.5 percent year-over-year labor force growth.”

By The Numbers

December 2012 Unemployment Rates

• Northwest Arkansas: 5.1 percent

• Little Rock: 6.3 percent

• Jonesboro: 6.8 percent

• Hot Springs: 7.5 percent

• Fort Smith: 8.1 percent

• Pine Bluff: 9 percent

• Statewide: 7.1 percent

• Nationwide: 7.8 percent

Source: Bureau Of Labor Statistics

The labor force grew from 235,200 to 231,700. Labor force is the total number of people employed or seeking employment.

“The number of unemployed people did shrink from a year ago,” Deck said. “Looking year-over-year, it looks strong.”

The number of unemployed people dropped from 11,900 to 13,200. There were 11,000 unemployed people in November 2012.

Deck said it is not unusual for the December unemployment rate to be higher than November.

“October and November tend to have the lowest unemployment numbers,” she said. “This year, at least on a national level, some retailers let seasonal workers go earlier than normal because of the long holiday season.”

Mike Harvey, chief operating officer of the Northwest Arkansas Council, said unemployment in the 5 percent range does not have much of an impact on recruiting companies to the area.

“From my perspective, if it gets back to the lows where it was before the downturn, it will get some attention,” he said. “Prospective businesses may be concerned about having enough people to fill jobs.”

The area’s unemployment rate ranged between 2 percent and 4 percent between 2001 and most of 2008.

Harvey said many companies considering opening in Northwest Arkansas are seeking very specialized, skilled workers. A majority of those people are already employed.

Harvey spent a day in June talking to a company considering locating in the area.

“We went hard recruiting them talking about how we can find the types of workers they would need,” Harvey said. “We got them real comfortable with the people that are already here, the people that are in the pipeline to enter to the workforce, and our ability to attract new people.”

He said Northwest Arkansas remains in contention for that company.

All employment sectors showed labor force growth year-over-year. Deck said that is another positive sign.

“Where I do worry is that we, as a region, are very tied to consumer spending,” she said.

The biggest work force group in Northwest Arkansas is trade, transportation and utilities, accounting for 48,300 workers. That sector includes wholesale and retail businesses.

Deck said she does not think numbers put out Wednesday by the Commerce Department showing a shrinking U.S. economy are reason for worry.

The Commerce Department reported the economy shrunk at an annual rate of 0.1 percent in the fourth quarter. The economy grew by 3.1 percent in the third quarter.

Gross domestic product grew 2.2 percent in 2012 compared with 1.8 percent in 2011, on an inflation-adjusted basis, according to the Bureau of Economic Analysis.

“History tells us you can’t put that much stock in preliminary numbers,” Deck said. “Defense spending cuts really pushed us off our high horse.”

Defense spending dropped 22.2 percent in the last three months of 2012.

Deck will be presenting her state and local economic forecast at the 2013 Business Forecast Luncheon at 11:30 a.m. Feb. 8 at the John Q. Hammons Center in Rogers. She will be joined by domestic forecaster Christopher Waller, research director and senior vice president at the Federal Reserve Bank of St. Louis, and international forecaster Adolfo Laurenti, deputy chief economist and managing director of Mesirow Financial.

John Roberts III, president and chief executive officer of J.B. Hunt Transport Services will be moderator.

Tickets are still available and can be purchased by Friday by calling 479-575-4151 or going to cber.uark.edu/383.asp.

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