Arkansas jobless rate holds at 3.4% as hiring slows in tight labor market

Arkansas’ unemployment remained at a sterling 3.4% as employers continued posting “help wanted” signs to find workers to fill key positions in the ever-tightening labor market.

According to labor force data produced by the U.S. Bureau of Labor Statistics (BLS), Arkansas’ civilian labor force declined by 873, a result of 832 fewer employed and 41 fewer unemployed workers. That puts Arkansas’ record-low jobless rate is 0.3 percentage points lower than the national average of 3.7%, touched earlier this month when only 130,000 new jobs were added to U.S. payrolls between months.

“Mirroring the trend seen at the national level, Arkansas’ unemployment rate remained stable in August,” said Susan Price, operations manager for the Arkansas Division of Workforce Services’ BLS program. “At 3.4%, the state maintains its lowest unemployment rate on record.”

Despite the robust jobs report, recent revisions to U.S. workforce data and other key labor market indicators highlight a slowdown in employment growth. Last week, the nonprofit group The Conference Board’s highly watched Employment Trends Index (ETI) lost ground in August for only the second time in the past decade due to a growing number of firms experiencing difficulty filling positions.

“In August, for only the second time since the financial crisis, the year-over-year growth in the Employment Trends Index turned negative,” said Conference Board economist Gad Levanon. “And indeed, job growth has clearly slowed in 2019. However, there is no reason to worry for now, since the stable behavior of the ETI is consistent with a slowdown in employment growth and is still far from indicating a decline in the number of jobs.

“Beyond economic growth, it is difficult to maintain strong employment growth in such a tight labor market. For the remainder of 2019, employment will continue growing at a more moderate but still healthy pace.”

Nationally, the hiring slowdown in August was well below the revised 159,000 positions posted In July and well below Wall Street expectations of 150,000 new job adds for the month. BLS officials also revised June’s job tallies down by 15,000, from 193,000 to 178,000, and lowered July workforce data by 5,000 from 164,000 to 159,000.

With the revisions, employment gains in June and July combined were 20,000 less than previously reported. Overall, U.S. job growth in 2019 has averaged only 158,000 per month thus far in 2019, well below the average monthly gain of 223,000 in 2018, BLS data shows.

In Arkansas, nonfarm payroll jobs in Arkansas rose 3,000 in August to total 1,269,700. Gains were reported in four major industry sectors, more than offsetting declines in six sectors. The largest increase occurred in government (+4,000), as public schools and universities began the 2019-2020 school year.

Educational and health services added 2,500 jobs with much of the expansion in social assistance, which includes education-related activities such as child and youth services, vocational rehabilitation and daycare centers. Jobs in manufacturing rebounded with 1,300 new positions, mostly at durable goods factories.

The greatest decrease occurred in leisure and hospitality at 1,900 job losses as the Labor Day weekend signaled the end of summer vacation session. The biggest loss, about 1,000, was in food services due to reported contractions at limited service restaurants and snack bars, state workforce officials said.

There were also notable declines in trade-transportation-utilities and professional and business services, with job losses of 1,800 and 1,100, respectively.

Compared to August 2018, Arkansas’ nonfarm payroll jobs are up 14,800. Seven major industry sectors added jobs, all increasing by 1,400 or more jobs each. For the year, employment in leisure and hospitality rose 3,400 with growth dominated by the food services industry.

In blue collar-focused industries, jobs in manufacturing expanded 3,300, with reported hiring in both durable and nondurable plants. Despite the difficulty in finding workers, employment in construction is also by up 2,700 as large projects across the state drive hiring.

In other key sectors, financial activities and educational and health services rose 2,200 and 1,700, respectively. Sizable growth also occurred in government and trade-transportation-utilities with one-to-one gains of 1,500 and 1,400.

Professional and business services posted the largest decline at 1,200. Most of the loss was reported in administrative and support services, a subsector which includes employment agencies that saw a decline of 2,000 positions.