Arkansas jobless rate inches lower

Arkansas’ joblessness rate dipped to 3.7 percent in July after five straight months at 3.8 percent, the U.S. Bureau of Labor Statistics said Friday.

The lowest unemployment rate in Arkansas was 3.6 percent from February through May last year.

The national unemployment rate in July was 3.9 percent, down from 4.0 percent in June.

Arkansas’ unemployment rate is effectively the same as the national rate, with the difference being statistically insignificant, said Michael Pakko, chief economist at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock.

There were encouraging signs in the report, Pakko said.

“The unemployment rate ticking down was, of course, good on the surface, but there was also a pretty substantial drop in the number of unemployed,” Pakko said.

There were about 1,310 fewer unemployed Arkansans from June to July and almost 540 fewer unemployed in the state when compared with July 2017.

The state had its first increase in the number of employed Arkansans — 452 from June to July — after nine months of declines, Pakko said.

The labor force, which is the sum of of the employed and those seeking work, continues to shrink, said Mervin Jebaraj, director of the Center for Business and Economic

Research at the University of Arkansas, Fayetteville.

Every month since January, the labor force has declined by exactly 0.1 percent, Jebaraj said. That is a loss of 8,530 workers in the labor force this year.

Even with Arkansas’ unemployment rate dropping to 3.7 percent, the state’s nonfarm payroll employment growth rate was 7.7 percent, less than the U.S. average of 13.8 percent since the end of the recession in June 2009, said Greg Kaza, executive director of the Arkansas Policy Foundation in Little Rock.

The reasons vary, Kaza said, but include the lack of an adequate skilled workforce in all Arkansas job sectors; tax competition with states in the region such as Florida, Tennessee and Texas, which have no state income tax; infrastructure shortages, and a shift in the economy away from manufacturing. There are other contributing factors to the state’s nonfarm payroll employment growth rate, Jebaraj said.

The sectors that are performing the best across the country aren’t doing as well in Arkansas, Jebaraj said. And the sectors that do well in Arkansas, such as farming and manufacturing, aren’t featured as much across the country, he said.

Another factor is that Arkansas’ population growth is lower than the national average, Pakko said.

Employment continues to be lopsided in Arkansas’ metropolitan areas compared with rural areas, Jebaraj said, but July was the best month of the year for rural employment.

Six industry sectors in Arkansas added jobs in July compared with July of 2017, four had minor job losses and one was unchanged.

The biggest increase was the professional and business services sector, which added 8,300 jobs.

Professional and business services is one of the highest paying sectors in the state. But the two of the three subsectors that have the top paying jobs — the professional, scientific and technical subsector and the management of companies subsectors — have added no jobs since July 2017, Jebaraj noted.

All 8,300 jobs were added in administrative and support services, the category of professional and business services that has the lowest paying jobs, Jebaraj said.

“All those jobs came from temporary and administrative positions,” Jebaraj said.

There were 3,800 more manufacturing jobs in July compared with a year earlier.

Construction added 2,000 jobs from July 2017 to last month.

Arkansas was one of 45 states in the country with an increase in construction jobs in the preceding 12 months, according to the Associated General Contractors of America.

“Construction job gains over the past year were more widespread across the country than at any time since the beginning of 2016,” the association’s chief economist, Ken Simonson, said in a written statement. “These results show that contractors are still optimistic about future construction activity. But it will be hard to sustain the increases unless more students learn of these opportunities and receive appropriate training.”

The biggest decline in jobs was in the information sector, which lost 900 jobs compared with July 2017.

Hawaii had the lowest unemployment rate in July at 2.1 percent, followed by Iowa and North Dakota at 2.6 percent each, New Hampshire at 2.7 percent, and Colorado and Vermont at 2.8 percent each.

Alaska had the highest unemployment rate at 6.9 percent, followed by West Virginia at 5.4 percent, Louisiana at 4.9 percent, Mississippi at 4.8 percent and New Mexico at 4.7 percent.