Unemployment in Arkansas shot up to 10.2% in April, ballooning to double-digits for the first time in more than 35 years. The jobless rate doubled from 5% in March, state officials announced Friday.
All 11 economic sectors suffered job losses as the coronavirus pandemic led to the shuttering of businesses in April. Nonfarm payroll employment dropped by 97,800 workers in April, leaving 1.17 million Arkansans employed in the sector.
The leisure and hospitality industry lost the most jobs from March to April, shedding 33,600 workers as hotels, retailers and restaurants closed or reduced operations because of the pandemic.
State leadership deflected from the unemployment increase by pointing out that the national jobless rate of 14.7% in April was much worse than what happened in Arkansas.
"Arkansas is 4.5% less than the national unemployment rate," Gov. Asa Hutchinson said Friday in opening his daily pandemic briefing. "That's not saying I'm happy with the 10.2% unemployment rate, but it is to put it in perspective as to where we are in relation to the nation."
The U.S. jobless rate jumped more than 10 percentage points in April and climbed from 4.4% in March.
Nonfarm payroll jobs in Arkansas are down by 111,200 from April 2019.
"I never expected to be saying that it's a good thing the number of job losses was only 100,000," said Michael Pakko, an economist with the University of Arkansas at Little Rock.
"But that really was better than expected. It shows that Arkansas, at least so far, hasn't been hit quite as hard by the covid-19 virus."
Last month, Pakko projected that April's unemployment rate would be 12.5%. "It's good news that we did better than that," he said Friday.
The total number of unemployed Arkansans increased by 64,234 in April. The number of employed dropped 133,832. The state labor force declined by 69,598, or about 5%.
Before the pandemic, Arkansas enjoyed full-employment status. In April 2018 the Arkansas unemployment rate was 3.7%. Statewide unemployment remained below that level until covid-19 jolted the economy.
April job losses touched every economic sector, from mining to manufacturing to financial services. "Employment declines have clearly spread beyond those particular sectors that are most at risk from the shutdowns, like retail and food services," Pakko said.
Educational and health services lost 20,300 jobs in April; trade, transportation and utilities declined by 11,800 jobs; professional and business services dropped 10,300 jobs; and manufacturing employment fell by 7,600.
"Prior to the covid-19 public health emergency, Arkansas' economy was developing at a pace that led to months of the lowest unemployment rate in Arkansas history," Commerce Secretary Mike Preston said.
"Since the pandemic began, we have seen substantial job declines across the nation, and it comes as no surprise that this economic downturn has affected every industry in Arkansas as well."
When set against April job losses in the nation, Arkansas did fare better by comparing economic sectors.
For example, leisure and hospitality lost the most jobs on the national level by dropping 47% in April. The decline in Arkansas was 31.1%. Under that sector, accommodations and food services jobs plummeted 45.5% nationally and 33.5% in Arkansas.
Arkansas may have been helped by dodging spikes in coronavirus cases and by avoiding a complete business shutdown, according to Pakko. "Both factors may have worked together to protect Arkansas from the sharp employment declines that have happened in other places," Pakko added.
Pointing to Pakko's prediction of a 12.5% jobless rate in April, Jay Chesshir, CEO of the Little Rock Regional Chamber of Commerce, said business leaders are "cautiously pleased" the monthly rate fell below the forecast.
Research shows that consumer spending in Arkansas has stayed higher than in other parts of the country, helping keep some workers employed. "This positive information is possibly why businesses have been able to keep more employees in the workforce," he added.
Employers are bringing workers back as the governor has begun lifting restrictions on business operations, Chesshir said.
"Our conversations with employers this week have also resulted in many stating they've recently returned to work or are planning to do so in June," Chesshir added. "While we could certainly see an additional uptick in May, our employment levels now seem to be stabilizing and possibly moving back in a positive direction."
Jobless rates also are likely to increase again for this month, and could reach 16% for the March-June quarterly period, Pakko said, though he noted there is no clear path forward. "The unemployment situation obviously depends on what happens with covid-19," he added.
Consumer spending remains depressed and the timetable for the full reopening and operation of businesses remain unsettled.
"It looks like the recovery might get underway later this year, but it probably will be a U-shaped recovery with a gradual return to more full-employment conditions," Pakko said.