The Bureau of Labor Statistics reported Wednesday (Feb. 29) that Arkansas and Mississippi were the only two states to see an increase in their 2011 average annual unemployment rate compared to 2010.
Several government and private sector economic reports of the past few days continue to indicate an erratic economic recovery in the U.S. and Arkansas.
AVERAGE JOBLESS RATES
Arkansas’ average jobless rate in 2011 was 8%, up from 7.9% during 2010, according to the BLS report. The average rate in 2009 was 7.5%. The Mississippi jobless rate during 2011 was 10.7%, up from 10.5% during 2010.
During 2011, the U.S. annual average jobless rate was 8.9%, down from 9.6% during 2010. The 2011 average jobless rate in Oklahoma was 6.2% during 2011, down from 6.9% during 2010.
Arkansas’ jobless rate, however, ended 2011 on a three-month decline, falling from 8.1% in September to 7.8% in December.
Of Arkansas’ largest job sectors, the manufacturing sector took the biggest hit in 2011. Manufacturers in the state employed 158,400 in January, with employment falling 2.1% to 155,000 during December. The trade-transportation-utilities sector, Arkansas’ largest, employed 236,700 during January 2011, and fell to 235,200 in December.
Also, the number of “mass layoff” incidents — where at least 50 jobs are lost — in Arkansas rose in 2011 to 154 — a level not seen since the data was first measured in April 1995. Following is a five-year look at the number of mass layoff incidents in Arkansas.
GDP, DURABLE GOODS
Also on Wednesday, the federal Bureau of Economic Analysis reported that the second estimate of the fourth quarter gross domestic product rose to 3% compared to the advance estimate of 2.8%.
Real gross domestic product — the output of goods and services produced by labor and property in the U.S. — increased 1.8% in the third quarter.
Following are GDP rate comparisons.
2011 GDP: 1.7% (still subject to revision)
2010 GDP: 3%
2009 GDP: -3.5%
4Q 2011 GDP: 3% (second estimate)
4Q 2010 GDP: 2.3%
4Q 2009 GDP: 3.8%
Federal Reserve Chairman Ben Bernanke on Wednesday told a Congressional Committee that the job market “is far from normal,” and improvements will require continued and higher growth in GDP rates.
A durable goods report issued by the Commerce Department on Tuesday (Feb. 28) raises doubts about consistent growth in production of which Bernanke says is needed.
New orders for manufactured durable goods in January was $206.1 billion, down 4% — the biggest January decline in three years. This decrease, down following three consecutive monthly increases, followed a 3.2% December increase. Excluding defense-sector manufacturing, new orders decreased 4.5%.
The American Trucking Associations’ reported Tuesday (Feb. 28) that the national trucking index fell 4% in January after a 6.4% jump during December.
ATA recently revised the seasonally adjusted index back five years as part of its annual revision. For all of 2011, tonnage rose 5.8%, slightly lower than the 5.9% previously reported, and matched 2010’s gain of the same magnitude. The index increased 3.6% from January 2011.
“Today, I’m not surprised that tonnage fell on a seasonally adjusted basis in January simply due to the fact that December was so strong,” ATA Chief Economist Bob Costello said in a statement. “I’m still optimistic about truck tonnage going forward. In fact, while many fleets said January was normal, they are also saying that February has been pretty good so far,” he said.
According to the ATA, trucking serves as a barometer of the U.S. economy, representing nearly 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9 billion tons of freight in 2010. Motor carriers collected $563.4 billion, or 81.2% of total revenue earned by all transport modes.
The closely-watched Credit Managers’ Index released Wednesday (Feb. 29) rose 1% to 55.8. The index measures sales in the manufacturing and service sectors, with an index below 50 marking economic decline, and above 50 noting expansion.
“The mood of the country could best be described as cautious and perhaps a little encouraged as far as economic growth prospects are concerned,” Chris Kuehl, economist for the National Association of Credit Management (NACM), said in the statement. “The cautious part stems from the sudden spike in the price of oil and its impact on the price of gasoline.”
One of the few declines in the aggregate index was with new credit applications. NACM officials said the decline likely suggests that those who sought to expand credit have “already made their move.”
“The trend is most definitely as positive as it has been in some time. While the overall index is still in the mid‐50s range, it has begun to head north at a pretty consistent pace.,” noted the NACM report. “This is something of a breaking point as compared to the data of a year ago. As has become obvious, the high point of 2011 was April, followed by a swift slide. The hope is that there will not be a repeat of that retreat, but the latest oil shock is not welcome.”
Greg Kaza, an economic researcher and executive director of the Arkansas Policy Foundation, has a contrarian view of a recent report that showed pattern improvements in national consumer debt and spending.
The Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit released Monday (Feb. 27) showed that aggregate consumer debt fell $126 billion to $11.53 trillion. The fourth quarter 2011 report also showed that mortgage and home equity lines of credit (HELOC) balances fell a combined $146 billion, “a sign that consumers continue to reduce housing related debt,” the Fed report noted.
Tim Yeager, Arkansas State Bankers Chair at the University of Arkansas, and economic Jeff Collins said the reduction of debt by consumers and uptick in spending are signs of an improving economy.
But Kaza says the report shows continued high levels of consumer debt, noting that the debt level in the first quarter of 2002 was $6.26 trillion, well below the $11.53 trillion during the fourth quarter of 2011. The Fed report also shows that the consumer debt level during early 1999, when the economy was strong, was $4.54 trillion.
“One should review the entire album, not a single snapshot,” Kaza said. “The situation has not improved. It has worsened in the long-run.”