State's jobless rate edges up to 6.3%

Arkansas' unemployment rate rose to 6.3 percent in August from 6.2 percent in July, the U.S. Bureau of Labor Statistics reported Friday.

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A graph showing Arkansas and U.S. joblessness rates.

It was the first increase in the state's unemployment rate since July 2013, when it was 7.7 percent.

It isn't surprising to see an uptick in unemployment after declining for months, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

The margin of error for Arkansas' unemployment rate is 0.9 percentage point, according to the Bureau of Labor Statistics in Dallas. With such a high margin of error, economists consider a trend over several months or a year to be more significant than the monthly snapshot.

There were 700 more unemployed people in the state in August than in July, the report said.

"It is discouraging to see the number of unemployed moving in the wrong direction," Pakko said.

The unemployment rate "appears to be stabilizing," said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

The unemployment rate has ranged between 6.2 percent and 6.4 percent since May, Deck said.

The state's civilian labor force, which is the combination of those who are unemployed and those who are seeking work, dropped 2,100 in August from July to 1,296,200, the sixth straight month that the labor force declined. There are 34,380 fewer Arkansans in the labor force than there were in March.

Arkansas' shrinking labor force contrasts with the country as a whole, where it continues to grow, Deck said.

"Labor force growth [nationally] is not nearly what it was before the recession began [in December 2007], when it would be 1.2 percent or 1.5 percent," Deck said. "Right now, nationally, it may be about 0.3 percent [growth], but it is growing."

That means that Arkansas is acting differently from the country, Deck said.

"That is most concerning," Deck said. "This isn't just what's going on everywhere in the country."

The good news, Deck said, is that the number of unemployed workers also is declining compared with August last year. There were 81,800 Arkansans unemployed and looking for work in August, 20,200 fewer than the 102,000 out of work in August last year.

"But unfortunately, it looks like they've dropped out of the labor force rather than finding jobs," Deck said.

It will be determined if people are actually leaving the state when the U.S. Census Bureau releases population numbers in March, Deck said, which would explain the drop in the labor force.

"They could be retiring or ceasing to look for work," Deck said. "Some people just give up. But there really aren't a lot of options to replace your income for someone who has been unemployed for a while. Maybe you have relatives or really good friends who are assisting you. Or you're unable to work and you draw disability payments."

Eight of Arkansas' 11 industry sectors saw an increase in jobs compared with August last year.

There were 3,600 more jobs in construction in the past year, followed by 3,200 more in manufacturing and in the leisure and hospitality sector. The educational and health services sector added 3,100 jobs in the past year.

None of the three declining sectors -- information, financial activities and government -- lost more than 600 jobs in the past year.

Government jobs actually increased by 2,800 in August compared with a month earlier.

"[Friday's] report continues a long-term seasonal pattern," said Greg Kaza, executive director of the Little Rock-based Arkansas Policy Foundation. "Arkansas government employment has increased each August during a 25-year period dating to 1990."

In all, 24 states reported increases in the unemployment rate, 15 had decreases and 11 had no change.

Georgia had the highest unemployment rate in August at 8.1 percent, followed by Mississippi at 7.9 percent, Rhode Island at 7.7 percent, Nevada at 7.6 percent and three at 7.4 percent each -- California, Michigan and Tennessee.

North Dakota had the lowest unemployment rate at 2.8 percent, followed by South Dakota, Nebraska and Utah at 3.6 percent each and Vermont at 4.1 percent.

Business on 09/20/2014

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