State unemployment falls to 5.7%

Graphs and information about the Arkansas and U.S. joblessness rates.
Graphs and information about the Arkansas and U.S. joblessness rates.

Arkansas' unemployment rate dipped to 5.7 percent last month, down from a revised 5.8 percent in May, the U.S. Bureau of Labor Statistics said Tuesday.

May's unemployment rate was first reported at 5.7 percent but a "rounding error" caused it to be revised to 5.8 percent, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

The national unemployment rate was 5.3 percent in June, down from 5.5 percent in May.

Arkansas' unemployment rate has ranged between 5.6 percent and 5.8 percent since August, Pakko said.

"That is not terribly surprising," Pakko said. "We're getting to the point where we're close to full employment."

Full employment is the state of the economy where all eligible people who want to work can find work. The Congressional Budget Office considers full employment to be 5.4 percent.

There was a significant decline in the state's labor force and employment level from 2011 through April last year, Pakko said.

"But the labor force has improved since then, and I think that in part reflects better economic conditions and better employment opportunities," Pakko said. "So we're seeing workers come back to the labor force now that things are improving."

The private sector of the state's economy grew at 2.4 percent compared with June 2014, said John Shelnutt, the administrator for economic analysis and tax research for the state's Department of Finance and Administration.

That was up from 2.2 percent growth from May 2014 to May 2015, Shelnutt said.

"And if you filter the sectors to look at the higher wage categories, there was quite an improvement [in June]," Shelnutt said. "That was growing at 2.4 percent also."

For example, there was acceleration in health services, a high wage category, and deceleration in food services and retail trade, lower wage categories, Shelnutt said.

"Of course, it is only a one-month move and could be revised away later," Shelnutt said.

June was the 20th consecutive month for an increase in employment, Pakko said.

From June last year to last month, eight industry sectors reported job gains and three had job losses. There was a total of 23,400 more jobs over the 12-month period.

The biggest one-year gain was in the educational and health services sector, which added 5,900 jobs.

Construction, which showed some weakness earlier in the year because of poor weather, gained 3,900 jobs since June of last year, Pakko said.

The trade, transportation and utilities sector added 4,700 jobs in the past year, with the biggest growth coming in wholesale trade, which was up by 2,000 jobs.

The leisure and hospitality sector grew by 4,400 jobs for the year.

Manufacturing remained weak, adding just 500 jobs since 2014.

None of the sectors that lost jobs since June 2014 -- government, other services, and the mining and logging sector -- fell by as much as 500 jobs.

Despite the strong unemployment report, some areas of the state's economy are not doing well.

There were 18 counties in the state with unemployment rates above 7 percent in May, the most recent information available.

Mississippi County had an unemployment rate of 9.5 percent in May, followed by Chicot County at 9.2 percent, Lafayette County at 8.3 percent, Jackson County at 8.1 percent and Jefferson County at 8 percent.

The breakdown of labor market status by age and race is available on the state level only for annual averages, Pakko said.

Arkansas had an average unemployment rate of 6 percent in 2014, but figures are significantly higher for some groups, Pakko said.

In 2014, Arkansans from 16 to 19 years old had the highest age-related unemployment rate of 13.1 percent. Those from 20 to 24 years old had an unemployment rate of 10.9 percent in 2014.

And black Arkansans had the highest unemployment rate last year among the state's minority groups at 9.9 percent.

Nationally, West Virginia had the highest unemployment rate last month at 7.4 percent, followed by Nevada at 6.9 percent, Alaska at 6.8 percent, and Mississippi and South Carolina both at 6.6 percent.

Nebraska had the lowest unemployment rate last month at 2.6 percent, followed by North Dakota at 3.1 percent, Utah at 3.5 percent, Vermont at 3.6 percent and Iowa at 3.7 percent.

Business on 07/22/2015

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