State’s unemployment rate holds at 7.5%

The state’s unemployment rate was unchanged last month, remaining at 7.5 percent in November, according to data from the U.S. Bureau of Labor Statistics released Friday.

The leveling off marks the end of a nearly year-long rise in Arkansas’ unemployment rate that began in December 2012 when it stood at 7.1 percent.

The fact that the unemployment rate held steady was a disappointment, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. Still, he said, the underlying numbers, including an increase in jobs and in the civilian labor force, were positive indicators, though they remained somewhat weak.

Nationally, the unemployment rate for November was 7 percent, down from 7.3 percent in October. The national rate has declined steadily since January when it stood at 7.9 percent. In the U.S., 45 states and the District of Columbia reported drops in unemployment in November compared with the previous month. Five states showed no changes.

Greg Kaza, executive director of the Arkansas Policy Foundation of Little Rock, said he’d be happier if the state’s unemployment rate mirrored the national trend of a steady decline. He said Arkansas’ unemployment rate was 0.5 percentage point greater than the U.S. rate - the first time that’s happened since November 2007.

“It’s better than going up, but it should be dropping slightly,” Kaza said of the November rate.

Arkansas’ civilian labor force - the sum of employed and unemployed people - rose in November. The labor force was 1,325,300 in November, up from 1,321,600 in October. The gain included the addition of 4,400 employed workers, the first increase since May, and included 700 fewer unemployed workers, but that was not enough to nudge the unemployment rate down.

Nonfarm payroll jobs increased by 1,700 in November to 1,202,400. Five sectors posted increases while six sectors showed declines.

Kaza said a bright spot in November’s report was the strength of the state’s trade, transportation and utilities sector, Arkansas largest private industry sector.

It saw an additional 1,600 jobs, the majority of which were retail jobs going into the Christmas shopping season.

The sector continues to grow at a rate well above the national average, Kaza said. In Arkansas, the trade, transportation and utilities sector has grown 7.5 percent, compared with the U.S. increase of 5.3 percent, since the economy began to expand in June 2009.

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said the month-over-month increase in the labor force numbers was positive, but the state’s labor force has fallen by about 20,000 from 1,348,100 in November 2012,indicating a disconnect between the recovery the rest of the nation is experiencing and what’s happening in Arkansas.

She noted that while the overall state unemployment rate has been stagnant for years and has been rising recently, most of Arkansas’ metropolitan areas are showing unemployment rates that are equal to or lower than the national average.

For October, the most recent data available, preliminary figures showed the Fayetteville-Springdale-Rogers Metropolitan Statistical Area had an unemployment rate of 5.1 percent, Jonesboro recorded 6.4 percent, Little Rock-North Little Rock-Conway had 6.5 percent, and the Fort Smith area’s unemployment rate was at 7.3 percent.

Statistical areas posting rates higher than the national average for October were Hot Springs with 7.8 percent and Pine Bluff with 9.6 percent.

Deck said the data indicate the rural areas of Arkansas are still not benefiting from the recovery.

She said the declines in employment in those areas were likely from the loss of jobs in the manufacturing sector and a more mobile workforce leaving for better opportunities elsewhere.

Business, Pages 27 on 12/21/2013

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