Jobless rate dips to 6.2% in state

Arkansas mirrors national figures

Tuesday, August 19, 2014

Arkansas' unemployment rate dropped to 6.2 percent in July from a revised 6.3 percent in June, and the state's labor force continued to decline, the U.S. Bureau of Labor Statistics reported Monday.

Since July 2013, 26,800 people have left the state's civilian labor force, which fell last month to 1.298 million, according to the report. The labor force is defined as those employed and those searching for work.

"We continue to see the labor force shrinking in Arkansas and at a much quicker rate than the nation," said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

The national unemployment rate was 6.2 percent last month, down from 7.3 percent in July 2013.

Arkansas' unemployment rate in June was revised up from an initially reported 6.2 percent.

"It seems on the surface that employment opportunities are improving," Deck said. "It's little bit of a head-scratcher as to why we would continue to see the labor force shrink."

The number of unemployed in Arkansas has been falling, mirroring the national trend, for 11 consecutive months, but the number of employed has been falling since April, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock, in his online blog.

"The good news is that there are fewer Arkansans unemployed," he said in an interview. "The decline was a little bit smaller than we've seen in consecutive months."

The exact cause of the shrinking labor force is unknown, several economists said. They have attributed the decline to several factors, including the retirement of "baby boomers," young adults remaining in school or returning to school, and workers moving out of the state.

There is also the issue of "discouraged workers" who are unemployed and not actively seeking jobs, said Marc Fusaro, associate professor of economics at Arkansas Tech University.

"We've been seeing this for years, ever since the recession began," he said of the shrinking labor force. "While it's nice to see the unemployment rate falling ... it's not because more people are getting jobs."

The number of unemployed in Arkansas in July fell by 20,800 compared with July 2013, when the unemployment rate was 7.7 percent.

But employment in Arkansas has also weakened. The number of jobs in the state fell by 6,000 workers last month, compared with July 2013.

Several neighboring states reported lower unemployment rates than Arkansas on Monday. The unemployment rate was 4.6 percent in Oklahoma; 5.1 percent in Texas; and 5.4 percent in Louisiana. Unemployment in Tennessee was 7.1 percent and in Missouri 6.5 percent.

Business on 08/19/2014