Arkansas unemployment rate up slightly in August

People wait in line to file for unemployment Friday, May 22, 2020, at the Little Rock office of the state Division of Workforce Services.  (Arkansas Democrat-Gazette/Stephen Swofford)
People wait in line to file for unemployment Friday, May 22, 2020, at the Little Rock office of the state Division of Workforce Services. (Arkansas Democrat-Gazette/Stephen Swofford)


Arkansas continues to achieve record employment levels though officials reported Tuesday that statewide unemployment ticked up slightly to 2.7% in August, up one-tenth of a percentage point from July and the first increase in nine months.

Nevertheless, statewide unemployment remains a full point below the national rate, which also climbed in August to reach 3.8% from 3.5% the previous month. Arkansas was only one of 10 states to register increases from July to August, while two states posted drops in unemployment. Maryland recorded the nation's lowest monthly rate of 1.7% in August.

Last month, Arkansas churned ahead with new records in employed workers -- adding 895 jobs in the month for a total of 1.35 million -- and improved the civilian labor force, which increased by 2,556. "Those are all positive numbers for us," Commerce Secretary Hugh McDonald said Tuesday.

Month-to-month unemployment rose for the first time since October 2022, with 1,661 more Arkansans actively looking for work in August. Arkansas' labor force participation rate was unchanged at 57.7% over the month.

Compared with August 2022, there are 28,229 more employed Arkansans and 9,525 fewer unemployed in the state. The state unemployment rate is down seven-tenths of a percentage point while the labor force participation rate is up one-tenth of a percentage point year-over-year.

"Arkansas looks to be more resilient than the rest of the nation right now," said Kendall Ross, executive director at the Center for Economic Development at the University of Arkansas -- Fort Smith. "This is really a resilient job market with growth in quite a few sectors. It's been pretty impressive and business is pretty good in Arkansas right now."

Post-pandemic job recovery has happened faster in Arkansas than the U.S. as a whole, according to Michael Pakko, chief economist with the Arkansas Economic Development Institute. Pakko noted on his arkansaseconomist.com blog that the state has produced robust employment growth of 5.7%, compared with 2.7% for the nation, since February 2020, just before the covid-19 outbreak.

"That's really the significant reading of all of this," Pakko said Tuesday of the latest results. "We're still seeing steady employment growth."

Job growth in government -- a seasonal trend with school openings -- led the way in August by adding more than 4,000 jobs, followed by business and professional services with more than 2,400 new workers. Leisure and hospitality grew by 1,300 workers, and private educational and health services was up by 1,000.

Since August 2022, nonfarm payroll jobs increased by 29,700 with the largest gains of nearly 13,000 in leisure and hospitality, 7,000 in private education and health services, and more than 5,800 in construction.

Continued upticks in employment from month-to-month are increasingly rare nationally as more workers have been added to payrolls this year. Arkansas was one of just five states that achieved another bump in total employment from July to August.

Employment and the state's labor force -- the Arkansans actively seeking a job -- have expanded steadily this year. Nonfarm payroll employment added 4,200 jobs in August for a fifth straight monthly increase. Payrolls statewide have added 26,700 workers over the past year, a 2% growth rate that matches the national average, Pakko notes on his blog.

"That's a pretty solid performance," he said. "Job growth really seems to be the story here."

Small month-to-month changes, even slight increases like in August, are insignificant when keeping the larger gains in mind, officials said Tuesday. "As long as the unemployment rate remains below 3%, you can't complain about a one-tenth of a percentage point tick up," Pakko said, though he noted the rate may go up again a little more when seasonal adjustments are made in coming months.

The U.S. Bureau of Labor Statistics, which compiles the state statistics, makes adjustments to account for seasonal hiring trends, such as when educational hirings are boosted in August as schools reopen and then lowered in May when they close.

Leisure and hospitality would be another sector heavily influenced by seasonal trends that generate high turnover along with hiring sprees in the summer and holiday months. "Leisure and hospitality have had the most bounce back so you continue to see job growth there," Pakko said.

Construction has been lifted by boosts in highway spending on the state and federal levels though building in the volatile residential housing market could soon decrease. "Construction is really strong right now," Ross said.

At some point, however, construction employment will slow to avoid a glut of empty homes and lower property valuations, he added. "I think we're going to see a slowdown in construction soon," Ross said. "We're right at the precipice of that. Construction has to plateau at some point."


Upcoming Events