State’s June jobless rate holds at 3.4%
A steady decline in Arkansas’ unemployment rate that started in November ended in June, when it held steady at 3.4 percent, the U.S. Bureau of Labor Statistics said Friday.
The state’s unemployment rate was 4 percent in November and it fell one-tenth of a percentage point every month until May, when it also was 3.4 percent.
The national unemployment rate was 4.4 percent in June, up 0.1 of a percentage point from 4.3 percent in May.
It is a good sign that the gap between the state’s unemployment rate and the national rate is at 1 percent, said Michael Pakko, chief economist at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock. The gap had narrowed in recent months, Pakko said.
Even with the state’s unemployment rate at its historically lowest level, economists still have concerns.
The low unemployment rate coupled with a growing labor force continues a longterm trend for the state, said Mervin Jebaraj, interim director of the Center for Business and Economic Research at the University of Arkansas, Fayetteville.
“To me, that indicates that the growth of the national economy is translating across the board to the state and several metropolitan areas in the state,” Jebaraj said. “It also tells me that there is still slack in the labor force participation rate.”
Labor force participation is defined as the population over 16 that is employed or looking for work. In Arkansas, the labor force participation rate is slightly below 60 percent, Jebaraj said. Almost
every state in the country has a labor force participation rate above 60 percent, he said.
So more of these people could enter the labor force and the unemployment rate would still remain low, Jebaraj said.
If the labor force was as tight as the unemployment rate indicates, wages should be increasing, Jebaraj said.
But wages are not rising significantly, he said.
Pakko is still skeptical about the employment numbers, he said. There were 1,318,145 employed Arkansans in June, up almost 28,700 from June last year. Arkansas has had a 2.1 percent gain in employment since June last year, one of the 15 biggest increases in the country, Pakko said.
“There have been really big gains [in employment] from January to June,” Pakko said. “It’s pretty clear that we’re experiencing a healthy rate of employment growth.”
Pakko expects the unemployment rate for the state will hover in the 3.5 percent range for the rest of the year.
“That’s simply because there is not a lot of room left for it to fall,” Pakko said.
It could be a welcome sign if the state’s unemployment rate were to creep up a bit, he said.
“That is if it is accompanied by big gains in the labor force,” Pakko said. “We still have some room to make up from weakness earlier in the decade.”
June marked the end of the eighth year of the country’s economic expansion, which began when the recession ended in June 2009, said Greg Kaza, executive director of the Arkansas Policy Foundation in Little Rock.
Arkansas has added 88,400 jobs in the past eight years.
The fastest growing sector during that period was the professional and business services sector, which added 32 percent more jobs in the past eight years, Kaza said.
“Professional and business services grew at a faster rate than the U.S. average of 26 percent,” Kaza said.
Eight industry sectors in Arkansas added jobs last month and three lost jobs compared with June last year.
The educational and health services sector grew by 7,400 jobs compared with June 2016, mostly in health care and social assistance. The professional and business services added 6,400 jobs over the same period.
The trade, transportation and utilities sector added 4,000 jobs since June last year.
Government had the biggest decline, losing 1,500 jobs in the previous 12 months.
Colorado and North Dakota had the lowest unemployment rate in the country in June at 2.3 percent each, followed by Hawaii at 2.7 percent and Nebraska and New Hampshire at 2.9 percent each.
Alaska had the highest unemployment rate at 6.8 percent, followed by New Mexico at 6.4 percent, Louisiana at 5.5 percent and Mississippi, Ohio and Pennsylvania at 5.0 percent each.