State’s June job­less rate holds at 3.4%

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - DAVID SMITH

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.

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