Baloney Sandwich Index predicts June jobless rate dip

The Fort Smith metro jobless rate for June is likely to be lower than the May 7.7% rate. That’s what the June Baloney Sandwich Index predicts.

May’s 7.7% jobless rate was well above the 7.2% in April, and higher than the 7.3% in May 2012, according to the U.S. Bureau of Labor Statistics (BLS). May was the 53rd consecutive month the Fort Smith metro jobless rate has been at or above 7%.

Unemployed persons in the region totaled an estimated 10,249 during May, above the 9,490 during April and the 9,725 during May 2012.

Ken Kupchick, author of the index and director of marketing and development for the River Valley Regional Food Bank, says the index has a 68.2% correlation with Sebastian County unemployment numbers. He uses three numbers to compute the BSI:
• The number of sack lunches served by the St. John’s Episcopal Church Sack Lunch program;
• The Sebastian County jobless rate; and,
• The Fort Smith metro jobless rate.

“The Baloney Sandwich Index has continued to show a strong correlation with county and metro unemployment. After predicting the uptick in unemployment for May, the June Index is predicting another leveling off,” Kupchick noted in his report.

The Index has moved from 125.4 in December to a low of 89.4 in February, rising steadily to 130.4 in May and settling back down to 126.4 in June. The Index at June 2012 stood at 175.2 before an August peak of 201.9.

Kupchick said the index decline in 2013 is primarily the result of a policy change at St. John's Sack Lunch program. Because of the long-term unemployment in the Fort Smith area, program volunteers were providing extra meals to those who requested them. The extra meals were included in the index count.

“However, the cost of providing the added meals was such that the program adopted a new policy as of January 2013. Starting this year, in response to a request for additional food, volunteers provided a extra sandwich rather than an entire lunch. The added sandwich is kept out of the total lunch count,” Kupchick explained.

The program began in 1986 by the church, located in downtown Fort Smith, to help the homeless. The handful of volunteers that began the program has grown to an estimated 125 volunteers who support the effort.
 
Kupchick provided the following notes on the index track.
• The drop forecasted the ease in the unemployment rate from from a high of 8.4% at the county level in January to a low of 6.8% in May and from a high of 8.7% at the metro level in January to a low of 7.2% in May.

• As the Index kicked back up in May, so did the unemployment rate to 7.3% and 7.7% at the county and metro levels, respectively.

• The slight downturn in the June Index suggests another softening in the unemployment rate.
 
• In looking at the June history, the number of monthly lunches distributed by the program continue to exceed the levels offered in '09 and '10 at the beginning of the recession's sting.

June jobless numbers for Arkansas’ metro area will be available on July 30. While the jobless rate is not now available, the preliminary BLS report shows that non-farm employment for June is 120,200, up compared to the 119,200 in May, and more than the 117,000 in June 2012. If the number holds, it will be the first time since December 2008 that non-farm employment in the Fort Smith area topped 120,000.

Arkansas’ June jobless rate was 7.3%, unchanged from May and unchanged from June 2012. Although the jobless rate remained the same compared to June 2012, the size of Arkansas’ labor force fell 1.67%, and the number of employed fell by an estimated 20,949, or down 1.66%.