Arkansas’ unemployment rate continued to flounder in June, remaining unchanged at 7.3 percent compared with May, the U.S. Bureau of Labor Statistics said Friday.
The unemployment rate in Arkansas has been essentially stuck in neutral for 18 months, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. It has stayed between 7.1 percent and 7.4 percent since December 2011 when it was 7.6 percent.
The month-to-month change in Arkansas’ joblessness rate has been statistically insignificant since December 2008, when it was 6.4 percent, considering the statistical margin of error in calculating the unemployment rate is a relatively high0.9 percentage point, according to the Bureau of Labor Statistics in Dallas.
That is contrary to what is happening nationally, Pakko said.
The national unemployment rate was 7.6 percent in June, the same as May, but a decline from 8.2 percent in June 2012. Arkansas’ unemployment rate in June 2012 was 7.3 percent, the same as last month.
“The bottom line is that Arkansas’ labor market has stagnated,” Pakko said. “On the national level, we’ve been seeing pretty steady improvement. Payroll job gains [nationally] are in the neighborhood of 200,000 [a month]. That’s not terrific but pretty decent growth. Over time, the unemployment rate nationally has been coming down, almost converging with Arkansas’. But Arkansas has been pretty much stuck at 7.3 percent.”
Arkansas had 22,600 fewer people in the labor force than in June last year.
There are at least two reasons for the continuing decline in the labor force, said John Shelnutt, the administrator for economic analysis and tax research for the state’s Department of Finance and Administration.
“There are some similar indicators at the national level that indicate that in part it’s demographics - some trends in the rate of retirement of baby boomers affecting those numbers - and the economy,” Shelnutt said. “I think we’re going to see [declines in the labor force] routinely unless we get an exceptional year of growth in the economy.”
Eight of the 11 industry sectors in Arkansas reported declines in jobs over the past year and one was unchanged.
The two sectors with job growth were significant.
The trade, transportation and utilities sector added11,300 jobs from June 2012 to last month. Most of those jobs - 8,700 - were in the retail trade category. The educational and health services category added 4,400 jobs in the past year.
The trade, transportation and utilities sector has grown by 8 percent since June 2009 when the recession ended, said Greg Kaza, executive director of the Arkansas Policy Foundation, a conservative research and advocacy group in Little Rock.
“That’s astonishing,” Kaza said. “That really highlights the importance of that sector.”
The biggest decline came in the construction sector, which lost 1,800 jobs in the past year. Manufacturing and government each lost 1,000jobs in the past year.
Shelnutt said he expects Arkansas’ unemployment rate to drop to 7.0 percent by the end of this year and to 6.6 percent by the end of 2014.
“That’s not rapid but without more rapid payroll job growth, it’s going to be a slow process,” Shelnutt said.
Nevada had the highest unemployment rate in June at 9.6 percent, followed by Illinois at 9.2 percent, Mississippi at 9.0 percent, Rhode Island at 8.9 percent and North Carolina at 8.8 percent.
North Dakota again had the lowest unemployment rate at 3.1 percent, followed by South Dakota at 3.9 percent, Nebraska at 4.0 percent, Vermont at 4.4 percent and Iowa and Wyoming, both at 4.6 percent.
Business, Pages 27 on 07/20/2013