Unemployment Falls Again

'Ideal' Target For Region: 4.5-5 Percent

Employment data show positive trends for Northwest Arkansas, according to watchers of the region’s economy.

March unemployment in the area dropped to 5.5 percent in March, down 0.3 percent from February, according to the federal Bureau of Labor Statistics. The rate sat at 5.8 percent in March 2012.

The overall workforce in the Fayetteville-Springdale-Rogers metropolitan statistical area dropped by about 100 jobs, to 234,800, a number that could be a slight concern if it’s accurate.

“We’d like to see unemployment dropping completely because of hiring, but the workforce numbers indicate there may be other factors involved,” said Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas. “Overall, things appear to be headed in the right direction.”

The overall workforce grew throughout 2012 when compared against the same months in 2011, before dipping in February to 235,182. If the March numbers are accurate, it could indicate a trend of shrinkage in the workforce and slowing economic recovery and growth, Deck said.

Several recent signs indicate the 5.5 percent unemployment rate will likely continue to fall, said Mike Malone, director of the Northwest Arkansas Council.

“We’re seeing outside investment in locally-based small businesses and start ups, which is likely going to lead to additional hiring, and our flagship industries are posting strong numbers,” Malone said. “I expect we’ll see the usual cycle of slipping numbers in the summer months, but it’s not a reason for concern.”

Unemployment is also moving in similar direction and percentage across different sectors of business, a sign that the economy as a whole is improving, Deck said.

“It’s nice, even growth, not a single spike somewhere that would skew the numbers,” she said. “We’ll be keeping a close eye on the labor-force numbers, but everything else not only looks positive, but it matches what we’re seeing and hearing out in the community.”

The region’s 5.5 percent rate outpaced both the national 7.6 percent rate and the 6 to 9 percent rates in other regions of Arkansas for March. The metropolitan statistical area for Northwest Arkansas includes Benton, Madison and Washington counties, as well as McDonald County, Mo.

The highest regional unemployment rate in Arkansas for March was the Pine Bluff area at 9.8 percent, down 0.3 percent from February 2013 but up from the 9.2 percent rate from March 2012.

In an ideal economy, the Northwest Arkansas unemployment rate would sit between 4.5 and 5 percent, Deck said.

“That’s the target. That would show both a strong local economy and a national rate of 5.5 or 6,” she said. “At those rates, the national economy has erased any fear of recession, and the local economy is outperforming the national averages.”

Northwest Arkansas unemployment dipped to just 2.8 percent back in October 2000, a number Deck said likely won’t be seen again soon.

Unemployment rates below 4 percent for the region could actually slow growth, as businesses would have to pay more for scarce workers, limiting hiring, production and profit, she said.

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