Arkansas continued to see record employment levels in May, posting job gains for the eighth-straight month that helped lower the state's unemployment rate to 2.7%, a new low and a full percentage point below the U.S. rate.
The Arkansas Division of Workforce Services reported Friday that the state set records in the number of employed and in the number of unemployed, which has dropped by more than 9,500 in the past four months. At the same time, the state labor force added 2,331 workers, keeping the participation rate flat at 57.5%.
Nonfarm payroll jobs rose to nearly 1.37 million in May, an employment record, and the number of unemployed Arkansans also reached a historic low at just more than 37,000. There were nearly 2,000 fewer Arkansans on the unemployment roll in May.
"It's another record-breaking report on a several fronts," Michael Pakko, state economist with the Arkansas Economic Development Institute, said Friday. "We don't have any signs of an economic slowdown here in Arkansas."
Arkansas is tracking in the opposite direction of the nation -- the U.S. unemployment rate skipped up from 3.4% in April to 3.7% in May. "That's always a good place to be," Commerce Secretary Hugh McDonald said of the growing gap in favor of Arkansas.
Though Arkansas is improving, the uptick in the United States bears watching but shouldn't be a major concern right now, Pakko said.
"At this point it's just one month of moving in opposite directions so it's probably nothing to write home about," he said. "If we start to see more of a slowdown on the national level, and that unemployment rate keeps creeping up, then it's probably likely Arkansas will follow suit."
For now, Friday's report showed steady growth across almost all sectors, an indication of solid economic growth, McDonald said. "We don't have a lot of swings in any one sector," he added.
Only three sectors reported slight job losses in May -- the largest was 400 jobs in government while transportation-trade utilities and information services each dropped 300.
Leisure and hospitality was the runaway leader in job creation both for the month and year-over year. The sector added 3,100 jobs from April to May, with food services registering the largest increase at 1,500 jobs, and increased by 11,000 on an annual comparison with data from May 2022.
"The service sector job growth in particular is standing out," Pakko said.
The Federal Reserve Bank skipped an opportunity to raise interest rates Wednesday, hitting pause on rate increases for the first time since March 2022. On Tuesday, the U.S. reported that prices for goods and services increased 4% in May compared with a year ago but up only 0.1% from April.
All signs point to a robust economy in the state, McDonald said. "Consumers are spending money and jobs are being created," he said. "Employment in the state is at an all-time high. There's really nothing to be concerned about right now."
For the month, after leisure and hospitality, the construction sector recorded the largest gain at 1,300 jobs; manufacturing added 1,200 workers; and other services was up by 1,100.
Compared with May 2022, private education and health services fell behind leisure and hospitality with an increase of 6,100 jobs; construction added 5,600 workers; trade-transportation-utilities was up 5,400 jobs; manufacturing jumped up 3,100; and other services also gained 3,100 jobs.