State's jobless rate still at 3.9%

Economists cite steady recovery

Information about the unemployment rate in Arkansas and The U.S
Information about the unemployment rate in Arkansas and The U.S

Arkansas' unemployment rate remain unchanged in July at 3.9 percent compared with June, the U.S. Bureau of Labor Statistics said Friday.

June's originally reported 3.8 percent unemployment rate was revised to 3.9 percent by the bureau.

The national unemployment rate was 4.9 percent in July.

For the past four months, Arkansas' unemployment rate has been below 4 percent.

"I wouldn't expect for it to go very much, if any, lower," said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. "But there probably isn't anything to create any appreciable increase in the unemployment rate, either. So we're probably at a plateau that will persist for a while now."

The unemployment rate has fallen because of job growth and not because of discouraged workers dropping out of the labor force or leaving the state, said John Shelnutt, administrator for economic analysis and tax research for the state's Department of Finance and Administration.

"We're getting [lower unemployment rates] the healthy way, which is through job opportunities," Shelnutt said. "I think it can stay this low with continued growth at the national level. We're having a steady kind of recovery, not the boom or bust of past cycles."

From 2012 to 2014, Arkansas' labor force declined almost monthly. But since 2014, it has grown steadily.

"I think maybe we should just enjoy these good times," said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville. "You never know when some company may announce large layoffs. But with the national economy continuing to grow, Arkansas could enjoy these low rates for some time."

Still, the July report continued some of the weakness from the June report, Pakko said.

Since late 2013 until last month, the number of employed Arkansans increased. But employment declined again by 2,700 jobs in July compared with June.

"That is a little bit of a reversal from the trends we had been seeing," Pakko said. "Still, overall, if you compare July this year to July of 2015, the unemployment rate is down 1.3 percentage points."

That drop of 1.3 percentage points from July to July tied Arkansas with Tennessee for the largest decline in the unemployment rate in the country, the bureau said.

Looking at the annual change, from July last year to last month, the state's labor force was up almost 26,900 and the number of employed was up more than 43,000. There are almost 16,300 fewer unemployed people over that 12-month period.

Jobs in the private sector have grown by more than 2 percent in the past year, Shelnutt said.

"The difference is that government jobs are fairly flat," Shelnutt said. "Private-sector service jobs are up about 3 percent, which is a very big [increase]."

As might be expected with such a low unemployment rate, the demand for financial talent outweighs the supply in Arkansas, said Stephanie Shine, a division director for staffing firm Robert Half Finance & Accounting.

Her division of Robert Half recruits primarily chief financial officers, controllers, financial analysts and staff and senior accountants.

"It's really an interesting market right now," said Shine, who works in Robert Half's Little Rock office that covers the state. The firm also has an office in Fayetteville.

"We have an uptick in positions but we don't have the candidates that we did a few years ago," Shine said. "The candidates are getting multiple offers. Even today I had a candidate get three offers. We're also seeing candidates get enormous pay increases with counteroffers [to stay with their existing employers]."

From July last year to last month, eight sectors had an increase in jobs, two had declines and one was unchanged.

The professional- and business-services sector had an annual increase of 9,100 jobs. The educational- and health-services sector added 6,600 jobs since July last year.

There were 12,300 fewer jobs in government in July compared with June. But the reason was seasonal drops in local and state government related to the summer break at public schools, according to the Arkansas Department of Workforce Services.

The unemployment rate was unchanged in 40 states, higher in seven and lower in three, according to Friday's U.S. Bureau of Labor Statistics report.

South Dakota had the lowest unemployment rate last month at 2.8 percent, followed by New Hampshire at 2.9 percent, North Dakota and Nebraska at 3.1 percent each and Vermont at 3.2 percent.

Alaska had the highest rate at 6.7 percent, followed by Nevada at 6.5 percent; New Mexico at 6.4 percent; Louisiana at 6.3 percent; and Arizona and Mississippi at 6 percent each.

Business on 08/20/2016

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