Arkansas out-of-job rate dips to 6.2%

Labor force also falls in past year

Arkansas' unemployment rate fell in June to 6.2 percent, down from 6.4 percent in May, the U.S. Bureau of Labor Statistics said Friday.

RELATED ARTICLE

http://www.arkansas…">Gauge points to economic growth

photo

A list and graph of Arkansas and U.S. joblessness rates comparing 2014 to 2014.

The rate has fallen every month since October, when the unemployment rate was 7.6 percent.

The national unemployment rate was 6.1 percent last month.

"The unemployment rate is coming down, but the civilian labor force is also falling," said Greg Kaza, executive director of the Little Rock-based Arkansas Policy Foundation.

The labor force is defined as the employed and those seeking work. The labor force has lost 19,400 jobs since June last year, which almost matches the 19,200 loss in the number of people unemployed.

That is a strong signal that the unemployment rate's drop to 6.2 percent can't be attributed to a surge in new jobs. The unemployment rate is calculated by dividing the number of unemployed workers by the number of people in the labor force.

Arkansas' unemployment data are determined from a monthly survey of about 800 households in the state.

A more comprehensive poll -- taken from nonfarm payroll data submitted by thousands of Arkansas employers -- continues to show that the number of jobs in the state is rising instead of falling.

The nonfarm payroll survey indicates that Arkansas has added 17,800 jobs since June last year.

"It is a very mixed story," said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville. "The story is one of improving employment opportunities, as you see from the payroll data, but at the same time the labor force is continuing to decline."

The state's labor force has been dwindling, monthly, since March.

For several months before that, the labor force and employment were growing, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

"In the past three months, things have turned south on us," Pakko said. "It seems like every time things go one direction clearly, they turn around. The three-month trends that we've seen in employment and labor force participation give me some cause for concern despite the declining unemployment rate."

The rate of decline in the labor force is consistent with the pace during the recession, Deck said.

There are several reasons why the labor force is shrinking, including workers retiring, choosing to leave the state, returning to school or becoming discouraged and abandoning a job search.

On a national level, studies have shown that the retirement of baby boomers accounts for about half of the decline in the labor force, Deck said.

June's report was very similar to May's, Deck said.

"And as we go into July, we'll see our expected drop-off in the labor force with the teachers leaving for the summer," Deck said. "We'll be looking into the fall to see if the economy can pick up the pace again."

In June, there were job gains in nine industry sectors and job losses in two sectors. The biggest gains were in the educational and health services sector and the leisure and hospitality sector, which each added 3,500 jobs.

Kaza noted that June marked the fifth year since the end of the recession in June 2009.

In those five years, Arkansas' nonfarm payroll jobs have risen by only 2.2 percent, or 25,500 jobs.

The biggest percentage decline in jobs over that period was in the information sector, which lost 15.3 percent, or 2,500 jobs. The biggest percentage gain in jobs was in the professional and business services sector with a 14.7 percent gain, or 16,400 jobs.

In June, Mississippi and Rhode Island had the highest unemployment rates in the country at 7.9 percent each, followed by Nevada at 7.7 percent, Michigan at 7.5 percent and three others at 7.4 percent each.

North Dakota again had the lowest rate at 2.7 percent, followed by Utah, Nebraska and Vermont at 3.5 percent each and South Dakota at 3.8 percent.

A Section on 07/19/2014

Upcoming Events