Despite a steady unemployment number of 3.8%, a University of Arkansas economist says there are underlying fundamentals that need to improve to maintain Arkansas’ continued jobs momentum.
Economist Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas Walton College of Business, said year-over-year job gains have cooled, the labor participation rate is still struggling, and rural employment is moving in the wrong direction.
Arkansas’ March unemployment rate was 3.8%, unchanged from February 2018. It hovered at 3.7% for the last half of 2017. Meanwhile in the separate Monthly Survey of Employers, overall job sector growth has slowed down.
“Since about 2014 until about December 2017, Arkansas’ employment growth has averaged on a year over year basis above 10,000 jobs every single month calculated annually. Now it’s about 4,900 jobs in a year-over-year basis, that’s about half of that. So since about December 2017, our employment growth has been a whole lot softer in Arkansas and I think that is something that we’re keeping an eye on,” said Jebaraj, who appeared on this week’s edition of Talk Business & Politics.
“During that time period from 2014 to 2017, we also saw broad based employment growth in Arkansas. Not only was employment growing in our urban or metro areas, but also growing in the rural areas,” he added. “Jobs would grow about 10,000-15,000 in metro areas and about 3,000-4,000 in the rural areas. Since that, employment growth has slowed down since December 2017, job growth is still positive. It’s in few thousands in the metro areas but it’s dropped to being negative again in the rural areas. So that is something to be watchful for, something to be concerned about.”
Jebaraj has consistently tracked the labor force participation rate, which measures the number of people who are employed or are looking for work out of the universe of those eligible. He says Arkansas’ rate has remained below a healthier 60% for several quarters.
“While the unemployment rate was at its record low at 3.6% last year, we saw some very small, about .2% improvement in the labor force participation rate. [We] went to about 58.2%. That slid back to 58% and remains rooted there all of this year and most of the end of last year,” Jebaraj said. “That’s a statistic we talked about repeatedly that we want to see improvement in the labor force participation rate. That is not really being improved when we’re seeing these small labor force declines.”
You can catch Jebaraj’s full interview in the video below.