State’s jobless rate at 7.1% last month

Drop accompanies employment rise

Arkansas’ unemployment rate dropped to 7.1 percent in February from 7.3 percent in January, its biggest one month decline since December 2011, the U.S. Bureau of Labor Statistics said Friday.

It was the sixth-straight month that there has been an increase in the number of Arkansans employed and a drop in the number of unemployed, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

The number of unemployed Arkansans fell by 2,900 to 94,100 last month compared with January. The number of employed rose by more than 5,300 last month, Pakko said.

The labor force grew by 2,400 to 1,330,600 in February, compared with the previous month. The unemployment rate has dropped every month since September.

“We are having a continuation of what are positive trends,” Pakko said.

One good thing about the drop in the unemployment rate is that it was not the result of the state’s civilian labor force shrinking, said Marc Fusaro, an associate professor of economics at Arkansas Tech University.

“In this recession-recovery environment, I always want to look at the labor force,” Fusaro said. “Because at times the reason the unemployment rate is falling is not because employment is getting better but because people are dropping out of the labor force. But that was not the case this month.”

The national unemployment rate was 6.7 percent in February, up 0.1 percentage point from January.

The best news in the report was the continued increase in construction jobs, said Greg Kaza, executive director of the Arkansas Policy Foundation. There were 300 jobs added in February in construction compared with January and 900 compared with February 2013.

“Construction has been lagging, but it was a positive in February,” Kaza said. “But overall the economy still isn’t creating as many jobs as we need.”

Compared with their typical seasonal pattern, both construction and manufacturing are doing well in the first two months of the year, Pakko said.

“In the past six months, we’ve seen a total increase of 6,600 jobs in these two sectors alone,” Pakko said. “Since the employment trough of February 2010, Arkansas has seen a cumulative increase of 40,200 jobs, but we remain 16,800 jobs below the employment levels that prevailed before the recession of 2008 and 2009.”

Even though it’s been a couple of years, it isn’t unusual to have a decline of 0.2 percentage point in the unemployment rate, Pakko said.

The change isn’t significant statistically, however. The statistical margin of error in calculating the unemployment rate in Arkansas is 0.9 percentage point, according to the Bureau of Labor Statistics in Dallas.

Pakko said he expects the state’s unemployment rate will drop to about 6.8 percent in the fourth quarter this year and should be at 6 percent by the end of 2015.

“We certainly shouldn’t expect to see a decline of two-tenths [of a percentage point] monthly on a regular basis,” Pakko said. “That’s an unusual circumstance. It’s quite possible we’ll see it plateau for a couple of months and then drop another tenth.That’s a more typical kind of pattern.”

Nationally, Rhode Island reported the country’s highest unemployment rate in February at 9 percent, followed by Illinois at 8.7 percent, Nevada at 8.5 percent, California at 8 percent and Kentucky at 7.8 percent.

North Dakota had the lowest unemployment rate at 2.6 percent, followed by Nebraska and South Dakota at 3.6 percent each, Vermont at 3.7 percent and Utah at 3.9 percent.

Front Section, Pages 1 on 03/29/2014

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