Unemployment in Arkansas dipped one-tenth of a percentage point in August, sliding down from 4.3% in July to 4.2% last month, according to state figures released Friday.
The state's labor force, which has been decreasing and creating hiring challenges for employers, rose in August by 1,651, a result of 3,412 more employed and 1,761 fewer unemployed Arkansans. The labor force increase was the first improvement since April.
"It's good news when everybody sees the unemployment rate go lower," Michael Pakko, chief economist at the Arkansas Economic Development Institute, said Friday. "The main thing to note is we've seen a steady decline in the number of unemployed."
The August data was unsurprising, Commerce Secretary Mike Preston said Friday. "Overall, this is kind of what we expected," he added.
A small uptick in the labor force is a positive development, Preston said, though he noted that there are still about 70,000 open jobs in the state.
"There is still some concern with labor force and it's one of the key issues we're facing," Preston added. "We just don't have enough people in the labor pool to be able to fill jobs."
Arkansas' unemployment rate remains below national levels. The U.S. unemployment rate was 5.2% in August, down two-tenths of a percentage point from July.
"Despite the slow pace of the recovery, we're still closer to pre-pandemic levels of employment that the nationwide average," Pakko said. "We're recovering ahead of the curve."
The state added 2,000 nonfarm payroll jobs in August, reaching a total of 1.25 million.
Six industry sectors posted job gains, while five sectors reported job losses. As expected, government showed the largest increase, adding 3,000 jobs, as teachers and school-related workers returned. The educational and health services sector added 1,700 jobs and leisure and hospitality gained 1,500.
The manufacturing sector recorded the biggest loss, dropping 1,700 jobs from July to August. Preston said he was "somewhat surprised" by the decrease but he attributed the change to logistical slowdowns in delivering components to factories and the difficulty in finding workers.
"A lot of that is due to supply chain issues and a little bit of labor issues and not being able to fill some open jobs," he added.
Compared with August 2020, Arkansas' nonfarm payroll jobs are up by 32,300. Nine major industry sectors reported growth, led by professional and business services, which jumped by 12,500.
Nevertheless, employment remains well below pre-pandemic peaks of February 2020, Pakko reported on his blog at arkansaseconomist.com. Total payroll employment is down by 22,100 jobs, or 1.8%, Pakko said.