Arkansas unemployment rate in May falls again to new all-time low of 3.8%, job growth remains flat

Arkansas’ jobless rate fell another point to another all-time low in May, but the state’s civilian pool remained flat as the number of employed and unemployed workers offset each other and the state’s youngest workers began looking for summer jobs.

Labor force data, produced by the U.S. Bureau of Labor Statistics and released Friday (June 17) by the Arkansas Department of Workforce Services, shows Arkansas’ seasonally adjusted unemployment rate now at a new all-time low 3.8%, compared to 3.9% in May and 5.5% a year ago.

However, Arkansas’ civilian labor force rose by a mere 46 workers in May with 1,073 more employed and 1,027 fewer unemployed Arkansans. The state’s jobless report largely mirrors the disappointing U.S. jobless report on June 3 when only 38,000 workers were added to payrolls of American companies.

Still, state workforce officials offered an upbeat assessment of the state’s tightening labor market.

“Arkansas’ jobless rate declined to 3.8% in May, as the number of unemployed dropped to 51,773. The number of unemployed in Arkansas has been on a steady decline since February 2011, when unemployment was at a record high of 114,892,” said Arkansas BLS Program Operations Manager Susan Price.

There are now 1,362,030 Arkansans now receiving paychecks or unemployment compensation, up more than 36,000 over the past year. In 2016, there has been about 29,000 workers added to the state’s brimming civilian labor.

Earlier this month, the U.S. Labor Department reported that the nation’s job market declined three percentage points to 4.7%, the lowest rate since 2007. According to BLS, however, the change in total nonfarm payroll employment for March was revised from +208,000 to +186,000, and the change for May was revised from +160,000 to +123,000. With these revisions, employment gains in March and May combined were 59,000 less than previously reported and job gains over the past quarter averaged a weak 116,000 per month.

ARKANSAS JOB SECTOR CHANGES
Year to date, Arkansas’ jobless rate continues to venture into new territory after touching its lowest-ever seasonally adjusted unemployment rate at 4.1%, now corrected from a previously reported 4% jobless rate. The preliminary average monthly jobless rate in Arkansas during 2015 was 5.4%. Arkansas’ average jobless rate for 2014 was 6.1%, down from the 7.4% average in 2013.

The closely-watched nonfarm employment in Arkansas increased by 2,700 in May to a total of 1,235,400. Employment gains came in eight major industry sectors, while two sectors saw slight declined and one remained flat. The nonfarm category does not include farm workers, private household employees, non-profit employees and “general government” employees. Investopedia estimates that the nonfarm category represents about 80% of the total workforce that contributes to national GDP.

Arkansas sectors leading the year-over-year gains were educational and health services at 1,500, which saw gains in health care and social assistance with reported hiring in nursing care facilities, hospitals, and physicians’ offices. Manufacturing added 600 jobs, all in durable goods manufacturing. Seasonal losses were posted in professional and business services (-700) and in government (-700).

In May, the Trade, Transportation and Utilities sector – Arkansas’ largest job sector – employment rose by 500 jobs to an estimated 258,600 workers in the labor pool, compared to 258,100 in April and 251,700 a year ago.

The robust Education and Health Services sector gained 1,500 jobs in May and now has 182,000 workers in the state’s overflowing labor pool, compared with 180,500 in April in March and 175,000 in the same period a year ago. This sector has seen steady growth in the past decade, with employment in the sector up almost 21% since May 2006.

Manufacturing jobs in Arkansas rose by another 600 in May to 153,900, reversing earlier losses this year and moving closer to year ago levels at 154,300. Peak employment in the sector was 247,300 in February 1995.

Government hiring in the state shrank in May as some 700 workers were laid off or removed from local, state or federal payrolls. There are now 216,600 government workers on state payrolls, now the second-largest nonfarm sector behind Trade, Transportation and Utilities. A year ago, there were 215,900 government jobs in Arkansas.

The construction sector employed an estimated 48,700 in May, up 400 from a month ago and close to year ago levels of 48,400. The sector is well off the employment high of 57,600 reached in May 2007.

Arkansas’ healthy tourism sector (leisure & hospitality) added 500 new workers in May as the traditional vacation driving season began on Labor Day weekend. There are now 117,500 workers in the state’s tourism sector, up 2.3% from a year ago. Last year, there were 114,900 workers in the state’s tourism industry.

LABOR MARKET STILL PULLING ITSELF OUT OF A DITCH
That weak job growth caused Labor Department Secretary Thomas Perez to issue an unusual statement explaining the nation’s employment situation in May, which came in well below forecasts.

“Despite job growth below expectations, the nation continues to recover from the Great Recession, with 75 consecutive months of uninterrupted private-sector job growth to the tune of 14.5 million jobs,” Perez remarked. “At this point in a recovery, we expect to see trade-offs between job growth and strong wage growth.”

Perez also said the nation still has a long way to go before it is completely healthy. Among the major worker groups, the unemployment rates for adult men (4.3%), adult women (4.2%, Whites (4.1%), and Hispanics (5.6 %) declined in May. The rates for teenagers (16%), Blacks (8.2%), and Asians (4.1%) showed little or no change.

“(We) still have more to do. So many families are still struggling to get by. We need to raise the federal minimum wage to put more money in people’s pockets. We need to enact paid-leave policies so that more people have the supports they need to work and take care of their families. And, we need to invest more in infrastructure spending.

“For more than six years, we have been pulling ourselves out of a significant ditch. The worst economic crisis of our lifetimes has given way to a dynamic recovery, helping millions of people get back to work and back on their feet. But we’re not done. In the remaining months of this administration, we will do everything we can, every day, to build on this progress and complete the unfinished business,” said the Labor Department chief.