January’s jobless rate drops to 4.6% in state

Decrease hailed as another sign of recovery

Unemployment continues to fall in Arkansas, with the state’s seasonally adjusted rate declining to 4.6% in January.

The state Division of Workforce Services on Monday reported the threetenths of a percentage point decline from the 4.9% unemployment rate reported in December.

Arkansas’ civilian labor force declined by 3,360, with 3,635 fewer unemployed and 275 more employed Arkansans. The U.S. joblessness rate declined four-tenths of a percentage point, from 6.7% in December to 6.3% in January.

Economic development officials welcomed the improvement in January.

“We continue to see a steady decline in unemployment as Arkansas remains on the path to getting our economy fully open,” said Secretary of Commerce Mike Preston.

“Arkansans have always been known as dedicated workers, and it is a testament to both our workforce and our business community for laying the foundation that is getting more and more people back to their job sites each and every day,” he said. “We are making great strides. We recognize that there are still workers looking for employment, and we will continue to work toward solutions for the people of Arkansas.”

The department said December’s unemployment rate had been revised up to 4.9% from the 4.2% it originally reported.

The revision is part of the U.S. Department of Labor’s annual update of the year’s unemployment data, which incorporates previously unavailable information.

But the department also said Labor’s Bureau of Labor Statistics is incorporating “a new estimation model” into its methodology, which will revise data going back to January 1976.

“The annual revision of Arkansas’ civilian labor force data shows that the impact of covid-19 on employment was not as large as originally estimated,” state operations manager Susan Price said in a news release. “Employment was revised up for every month of 2020. Based on updated information, Arkansas’ unemployment rate peaked at 10% in April 2020 instead of the 10.8% originally calculated.”

Jobs in trade, transportation, and the utilities segment of the state were down by 7,100 in January, Monday’s report said. Most of the loss, 5,500 jobs, came in retail trade. The drop was attributed mostly to the end of temporary hiring for the holiday season. The number of government jobs fell by 3,500 with educational services accounting for much of the decline. The leisure and hospitality segment saw a loss of 2,700 jobs.

Economists say one of the most striking features of the pandemic-driven economic downturn has been the number of workers who, as the government counts things, have left the labor force.

In the year since the pandemic upended the economy, more than 4 million people in the United States have quit the labor force, leaving a hole in the job market that cuts across age and circumstances. An exceptionally high number have been sidelined because of child care and other family responsibilities or health concerns. Others gave up looking for work because they were discouraged by the lack of opportunities. And some older workers have called it quits earlier than they had planned.

These labor-force dropouts are not counted in the most commonly cited unemployment rate, making the group something of a hidden casualty of the pandemic.

Now, as the labor market begins to emerge from the pandemic’s vise, whether those who have left the labor force return to work — and if so, how quickly — is one of the big questions about the shape of the recovery.

“There are a lot of dimensions related to the pandemic that I think are driving this phenomenon,” said Eliza Forsythe, a labor economist at the University of Illinois. “We don’t really know what the long-term consequences are going to be because it is different from the past.”

There is some reason for optimism. Economists expect that many who have left the labor force in the past year will return to work once health concerns and child care issues are alleviated. And they are optimistic that as the labor market heats up, it will draw in workers who grew disenchanted with the job search.

In Florida the unemployment rate declined to 4.8% in January as businesses continued to reopen and key service industries started to see more customers as the number of new covid-19 infections begins to wane, the state’s Department of Economic Opportunity said Monday. Florida’s rate for January 2020 — just two months before the virus struck down the economy — was 2.8%, an all-time low.

“We are seeing employment and economic growth due to extended federal relief, increased consumer spending, falling covid cases and expanded vaccine rollout,” said Julia Dattolo, president and chief executive officer of CareerSource Palm Beach County.

Information for this article was contributed by Andrew Moreau of the Arkansas Democrat-Gazette, Sydney Ember of The New York Times, and David Lyons of the South Florida Sun Sentinel.