Arkansas' labor force shrinking, jobless rate at 7.4%

Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire and presented by Fort Smith-based Benefit Bank. Other supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.

Arkansas’ jobless rate during August was unchanged compared to July, but a year-over-year comparison shows that 27,000 have left the workforce and more than 26,000 fewer Arkansans are employed.

The state’s jobless rate was 7.4% in August, up slightly compared to 7.3% in August 2012. Arkansas was one of 12 states to post an increase compared to August 2012, according to the Monday (Aug. 19) report from the U.S. Bureau of Labor Statistics.

Arkansas’ labor force was an estimated 1.323 million in August, down 27,363, or 2%, compared to August 2012. The August figure reflected 4,744 fewer Arkansans in the labor force compared to July.

The number of employed in Arkansas during August was 1.224 million, a drop of 26,639 compared to August 2012, or down 2.12%. The number of employed dropped 5,322 between July and August.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to 7.3% during 2012. Also, August marked the 55th consecutive month that Arkansas’ jobless rate has been at or above 7%.

ARKANSAS’ LABOR FORCE DECLINE
Greg Kaza, economic researcher and executive director of the Arkansas Policy Foundation, said the underlying numbers are more telling than the unemployment percentage.

“Arkansas' civilian labor force – all employed and unemployed Arkansans – is contracting in an expansion, an unprecedented development in state labor market records that date to the mid-1970s,” Kaza explained in a memo to The City Wire. “The simplest explanation for the unprecedented contraction of Arkansas' civilian labor force is that economic policies are not working. Discouraged workers are leaving the work force because they cannot find employment.”

Kaza’s memo included the following points based on the June labor report.
• Arkansas' civilian labor force was 1,332,500 in June 2013, a decline of 20,300 workers from June 2009 when the Great Recession ended and a new expansion started. The civilian labor force was 1,352,800 that month.

• Arkansas Department of Workforce Services data show civilian labor force growth at the four-year mark in three prior expansions (1981-1990, 1991-2001, 2001-2007). These periods were November 1981 to November 1985 (1,025,700 to 1,060,200); March 1991 to March 1995 (1,120,300 to 1,228,800); and November 2001 to November 2005 (1,254,100 to 1,351,200).

• Arkansas' labor market is weaker than past recessions when the force expanded or contracted by fewer workers. These recessions were from March to November 2001 (1,253,800 to 1,254,100); July 1990 to March 1991 (1,124,700 to 1,120,300); and December 2007 to June 2009 (1,370,900 to 1,352,800). The force added 300 (2001) but fell 4,400 (1990-91) and 18,100 (2007-09) versus the recent decline of 20,300 (2009-13).

• The U.S. civilian labor force has expanded in the last four years, increasing from 154,710,000 (June 2009) to 155,835,000 (June 2013).

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during August was an estimated 250,400, down from 251,400 in July and well ahead of the 241,200 during August 2012.

Manufacturing jobs in Arkansas during August totaled 154,700, up from the 153,800 in July and below the 155,300 in August 2012. Employment in the manufacturing sector fell in 2012 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during August was 214,700, down slightly from 214,800 in July and below the 215,900 during August 2012.

The state’s Education and Health Services sector during August had 176,400 jobs, down from the 177,000 during July and up from 171,500 during August 2012. Employment in the sector is up more than 26% compared to August 2003.

Arkansas’ tourism sector (leisure & hospitality) employed 101,400 during August, down from 101,600 during July, and below the 102,300 during August 2012. At a revised 103,700, January 2013 marked a new employment high in the sector.

NATIONAL DATA

The BLS report also noted that 36 states had unemployment rate decreases from a year earlier, 12 states had increases, and two states had no change. The national jobless rate during August was at 7.3%, and was down from the 8.1% in August 2012.

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Nevada had the highest unemployment rate among the states in August at 9.5%. The next highest rate was in Illinois with 9.2%. North Dakota again had the lowest jobless rate, 3%.

The August jobless rate in Oklahoma was 5.3%, unchanged compared to July and August 2012.

Missouri’s jobless rate during August was 7.2%, up from 7.1% in July and up compared to 7% in August 2012.

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