Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire. Supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.
The Fort Smith metro jobless rate for April fell below 6% for the first time since November 2008, but the lower rate is not an indicator of a growing workforce or growing number of employed.
April’s jobless rate in the metro area was 5.9%, a full percentage point below the 6.9% in March and well below the 7.5% in April 2013. April’s data is subject to revision in future reports from the U.S. Bureau of Labor Statistics.
However, the size of the Fort Smith regional workforce during April was 126,596, down from 128,516 during March, and well below the 131,065 during April 2013. The labor force reached a revised high of 140,253 in June 2007, meaning the April workforce size is more than 10% down from the peak number.
All of the eight metro areas in or connected to Arkansas had a jobless rate decline in April compared to March, and also had jobless rate declines compared to April 2013. However, all metro areas except Jonesboro had a workforce and/or employment level decline compared to April 2013. During April, the lowest metro jobless rate in the state was 4.5% in Northwest Arkansas and the highest rate was 8.4% in the Pine Bluff area.
JOBLESS RATE RELEVANCY
Greg Kaza, an economic researcher and director of the Arkansas Policy Foundation, said the jobless rate has typically been of interest only to the media.
“Far be it from me to tell the media what they should look at as the headline number ... but I’ve always looked at the percentage growth in payroll employment (compared to state and national averages),” Kaza said when asked about the relevancy of the jobless rate.
Kaza said the employment numbers are not impressive in Arkansas and most of the metro areas.
“Payroll employment is the broadest economic indicator at the local level. Payroll employment, statewide, should be stronger than what it is. It’s a weak expansion at best,” he explained.
He added that individuals, businesses and governments should be considering their options for when the expansion ends – as all business cycles do.
“The really big question, going forward, is stepping out and realizing that this expansion, or whatever you want to call it, that this expansion is going to end eventually. The question then is, ‘How do we get prepared for it? ... How do households prepare for it? How do your business readers prepare for it,’” Kaza said.
Kaza mentioned four broad theories behind the decline in the labor force:
• Baby boomers leaving the job market to retire;
• More people living on Social Security and/or unemployment benefits;
• Some move to another (often larger) metropolitan area to look for work; and
• People “who are just discouraged and have dropped out” of the job market.
“But until you survey them, you can’t say why they are dropping out of the workforce,” Kaza said.
The official employment rate does not include all eligible for the workforce. For example, the U.S. jobless rate in April was 6.3%, but the “U-6” rate, which measures those “marginally attached” to the labor force, was 12.3%.
FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 7,501 during April, down from the 8,913 during March, and well below the 9,800 during April 2013.
The Fort Smith area manufacturing sector employed an estimated 18,200 in April, unchanged compared to March, and below the 18,300 in April 2013. Sector employment is down almost 36% from a decade ago when April 2004 manufacturing employment in the metro area stood at 28,400. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.
Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector — totaled 24,200 in April, up from the 24,100 in March, and above the 23,700 during April 2013. Employment in the sector reached a high of 25,700 in December 2007.
Employment in the region’s tourism industry was 9,500 during April, up from 9,300 in March and above the 9,200 in April 2013. The sector reached an employment high of 9,800 in August 2008.
In Education & Health Services, employment was 16,600 during April, up from 16,500 in March and below the 17,100 during April 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.
In the Government sector, employment was 19,600 during April, unchanged compared to March and unchanged compared to April 2013.
Unemployment rates were lower in April than a year earlier in 357 of the 372 metropolitan areas, higher in 12 areas, and unchanged in three areas, noted the broad BLS report.
The U.S. unemployment rate in April was 6.3%, down from 7.5% from a year earlier. Arkansas’ jobless rate was 6.6% in April, down from 6.9% in March and down from 7.5% in April 2013.
Oklahoma’s jobless rate during April was 4.6%, down from 4.9% in March, and down compared to 5.3% in April 2013. The Missouri jobless rate during April was 6.6%, down from 6.7% in March and unchanged compared to April 2013.
ARKANSAS METRO AREAS
April 2014: 4.5%
March 2014: 5.4%
April 2013: 5.3%
April 2014: 5.9%
March 2014: 6.9%
April 2013: 7.5%
April 2014: 6.1%
March 2014: 7.1%
April 2013: 7.2%
April 2014: 5.6%
March 2014: 6.5%
April 2013: 6.7%
Little Rock-North Little Rock-Conway
April 2014: 5.5%
March 2014: 6.3%
April 2013: 6.3%
April 2014: 7%
March 2014: 8.2%
April 2013: 8.9%
April 2014: 8.4%
March 2014: 9.3%
April 2013: 9.4%
April 2014: 5.7%
March 2014: 6.6%
April 2013: 6.9%
FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates