Arkansas’ jobless rate dipped back to near-record territory a day after Gov. Asa Hutchinson pre-empted the state’s monthly employment status report during an agriculture summit in Little Rock where he expressed concerns about the Trump administration’s ongoing trade war.
On Friday (Aug. 17), the state Department of Workforce Services reported that Arkansas’ seasonally adjusted unemployment rate declined one-tenth of a percentage point to 3.7% in July after remaining fixed at 3.8% since February. State workforce officials said the updated U.S. Bureau of Labor Statistics (BLS) data showed a decline in the state’s labor force of 1,348,409 by 857 workers, a result of a positive trend of 1,309 fewer unemployed and 452 more employed Arkansans.
“Arkansas’ unemployment rate declined to 3.7% in July, pushed down by the decrease in the number of unemployed,” said Susan Price, operations manager for the state’s BLS program. “The drop in the unemployment rate this month mirrors the trend seen at the national level.”
Arkansas unemployment touched an all-time low of 3.4% during a three-month stretch in the summer of 2017 and has not risen above 3.8% since. The state’s jobless rate fell to 4% in June 2016, the first time at that level since state labor officials began compiling such records.
On Thursday, Gov. Hutchinson gave an early preview of the monthly DWS report at the Agriculture Technology & the Law Summit conference at the Statehouse Convention Center in Little Rock. At the summit, Hutchinson said he was concerned that trade markets are closing rather than opening and said he hopes the Trump administration’s ongoing dispute over tariffs ends soon.
“… I understand where President Trump is coming from, that we need to rebalance trade,” he said. “And China indicated that China would buy more agricultural commodities in order to rebalance that trade.
“It is important that they make more progress in terms of technology and protecting our intellectual property that is open and accessible to them,” the governor continued. “They need to make some changes, but I am anxious to get to the point where President Trump can declare a victory in the tariff war and we can move on.”
Despite Hutchinson’s apprehension, trade concerns have not fully filtered into current state and U.S. employment numbers that mostly reflect nonfarm related employment. Two weeks ago, U.S. Labor officials reported that the U.S. jobless rate had edged back under 4% as nonfarm payroll employment rose by 157,000, bolstered by big gains in new hires in professional and business services, manufacturing and health care and social assistance sectors.
The point spread between the Arkansas and U.S. jobless rate of 3.9% has caused widespread optimism among small business owners and larger corporate employers despite concerns that there are not enough high-skilled and capable workers to fill key positions in growing sectors.
Concurrent with the state’s unemployment report, the Conference Board’s leading economic indicators (LEI) on Friday showed that the nation’s post-recovery expansion continues unabated. The independent research group, known for its consumer confidence survey, also pushes out a monthly index that measures 10 components of the U.S. economy, ranging from average weekly manufacturing hours, consumer prices and unemployment insurance claims to new factor orders, stock prices of top U.S. companies and residential and commercial building permits.
“The U.S. LEI increased in July, suggesting the US economy will continue expanding at a solid pace for the remainder of this year,” said Conference Board economist Ataman Ozyildirim. “The strengths among the components of the leading index were very widespread, with unemployment claims, the financial components, and the (manufacturing) new orders index making the largest positive contributions.”
Between June and July, nonfarm payroll jobs in Arkansas declined by a seasonal 13,000 to 1,237,900 as seven major sectors pushed workers out of the labor pool. Most of the losses occurred in local and state government as public schools began summer break.
The blue collar-focused construction sector, which has struggled finding workers during key summer months, added 1,200 jobs as commercial and residential building activity continues to grow. The red-hot manufacturing sector also added 1,200 jobs in July on top of the same gains in June as the nondurable, or soft goods, sector that produces food, clothing and other perishable items that are consumed in three years continued to outpace other sectors.
Jobs in educational and health services increased 1,000. All gains were posted in health care and social assistance. There were also seasonal expansions that occurred in the trade-transportation-utilities sector and the leisure and hospitality sector.
Compared to a year ago, Arkansas’ nonfarm payroll employment is up 14,700 with six major industries expanding and four sectors reporting minor losses. Jobs in professional and business services advanced by 8,300 with most of those gains in administrative and support services, a subsector which includes employment agencies, office administration services, and telephone call centers.
As noted in month-to-month data, manufacturing added 3,800 jobs in July and construction employment spiked by 2,900 as highway and road improvement projects picked up pace. Educational and health services gained another 1,200 jobs year-over-year.
The state’s largest sector — trade transportation and utilities – was down by 300 from a year ago to 250,100 workers in the state’s brimming labor pool. Mining, which includes the state’s oil and gas sector, has laid off 500 workers since July 2017 as top Fayetteville Shale producers have announced plans to exit or auction their assets in the Arkansas natural gas shale play.
Information and government saw job losses of 900 and 100, respectively, while other services and financial activities saw slight gains or were mostly flat. As of July, Arkansas has 8,465 fewer workers in the civilian labor pool than it had a year ago when it had a total of 1,356,874 employed and unemployed workers.
Nationally, unemployment rates were lower in July in 11 states, higher in 2 states, and stable in 37 states and the District of Columbia, BLS data shows. Hawaii had the lowest unemployment rate in July at 2.1%, while Oregon set a new series low at 3.9%. Alaska continues to post the highest jobless rate at 6.9%, but is two percentage points below June’s 7.1%.