For the third straight month Arkansas’s unemployment rate is holding steady at 3.9 percent, according to the U.S. Bureau of Labor Statistics’ August report. It is a full point below an also flat nationwide unemployment rate.
Kathy Deck, the director of the Center for Business and Economic Research as the Sam M. Walton College of Business at the University of Arkansas at Fayetteville, says the jobless rate remaining stable isn’t necessarily a bad position for the state.
“The fact that we’re able to maintain such a low unemployment rate even as our labor force is growing [since Aug. 2015] means that we’re creating jobs. I think it’s a bit unrealistic to think our unemployment rate will go much lower,” says Deck. “Structurally we’re at a level that’s very close to full employment.”
Economist Michael Pakko, the Chief Economist and State Economic Forecast at the Institute for Economic Advancement at the University of Arkansas at Little Rock, agrees that the state is an enviable position but says there is a marked slow-down as of late.
“We’ve seen a little bit of a setback over the past three months. The number of unemployed Arkansans has crept upward and both the labor force and the number of employed have declined over the past three months but we’re still well ahead of where we were a year ago,” Pakko says.
This time last year Arkansas’s unemployment rate was over a point higher at 5.1-percent.
“That’s the largest decline in the country tied with Tennessee,” says Pakko. “We’re still in a good position, it’s just that, not surprisingly, after such strong gains earlier this year things have tapered off a little bit.”
Professional and business services, education and healthcare, along with leisure and hospitality posted some of the biggest jobs gains while manufacturing and logging had some of the largest declines since August 2015.
Deck says many of the sectors posting jobs gains are traditionally low-paying service positions. She notes some positions traditionally associated with higher wages, like manufacturing, now often level out around the state’s median income. Deck says, a struggling manufacturing sector is especially important since over 150,000 jobs are tied to it.
“We’re underperforming relative to the United States’ manufacturing employment. When you’re a manufacturing heavy state like Arkansas it would be great if we were seeing that sector grow faster,” says Deck.
The Arkansas Economic Development Commission touted a 400 job expansion at a Batesville factory on Monday and while that is “clearly a big deal” for most communities, Deck suggests it’s just a drop in the bucket.
“Although we always look for these jobs announcements, and they are really important to local communities, it’s not necessarily an economic cure-all,” Decks says. “In terms of overall manufacturing employment in the state, to give you a sense of the size of it, there are 153,000 jobs in the manufacturing sector as of August. 400 is a nice number but it doesn’t necessarily change the direction of that industry.”
Arkansas was not alone in posting a flat unemployment rate in August. 40 other states also remained stable while unemployment grew in six states and lowered in three. South Dakota and New Hampshire posted the best unemployment numbers in August, at 2.9-percent and 3-percent. Alaska had the highest rate at 6.8 percent