Unemployment in Arkansas rose in October for the fourth straight month, increasing two-tenths of a point to 3.1%, revealing early indications of weakening economic conditions.
Arkansas remains well below the overall U.S. unemployment rate of 3.9%, but joined 25 states that also reporting rising unemployment. It marked the first time since January that unemployment in the state was above 3%.
Arkansas opened the year with a 3.4% unemployment rate in January – same as the U.S., which has increased a half-point since then while the state has fallen by three-tenths of a point.
"The gap between Arkansas and the U.S. has widened since the beginning of the year and that's good to know," said Kendall Ross, executive director of the University of Arkansas at Fort Smith.
The Arkansas Division of Workforce Services reported Friday that 1,813 fewer Arkansans were employed last month and the number of unemployed jumped by 2,616. Arkansas' civilian labor force remained at a record level, adding 803 job seekers, and the labor-force participation rate was unchanged at 57.8%.
October's job data "reinforces suggestions of a slight weakening of labor market conditions" that began to appear this summer, according to Michael Pakko, chief economist at the Arkansas Economic Development Institute.
"This is the third straight month of weakness ... so it looks like there's been some weakening of labor-market conditions in Arkansas," Pakko said Friday. "But if you look at where we were a year ago, or even less than that, we still have record-low unemployment and record-high employment. There's nothing to panic about here even though there has been some softening of the markets."
State officials have been expecting slight upticks since the state began to register record unemployment lows from March-May when the joblessness rate fell to 2.3%. Increases began in June with a spike to 2.8%. "After multiple months of record unemployment, it's not surprising that it's ticking up a little bit," Clark Cogbill, spokesman for the Arkansas Department of Commerce, said Friday.
Job gains in the past year have been robust, Cogbill said, noting that Arkansas has added 27,000 workers since October 2022. "Year over year is certainly looking good," he said.
Yet manufacturing is lagging and has dropped 2,800 jobs from a year ago. The sector, a core contributor to the state economy, has tumbled in four consecutive months and has lost 3,700 jobs, including 500 last month.
Beige Book economic reports in September and October from the Federal Reserve Bank pointed to a weakening in the Arkansas manufacturing sector. Both reports said manufacturers were citing drops in new orders and production. The October report, however, called for "an improving outlook for the sector."
Arkansas recorded 161,800 manufacturing workers in October. "It seems that manufacturing is moderating back to pre-pandemic levels," Ross said Friday. "It makes you wonder if this is a seasonal thing and it might pick back up, or if this is becoming permanent. That's a little concerning as we move ahead."
Looking forward, Pakko is projecting listless job growth in the state. "There's no reason to suspect that we'll see declines across the board, but I would expect to see sluggish employment growth for the next few months," he said.
Arkansas is confident of a manufacturing turnaround, Cogbill said. "Employers, specifically manufacturing employers, are telling us they still have open jobs out there," he said. "The manufacturers are telling us they have job openings and we have new jobs coming in."
The government and trade, transportation and utilities sectors posted the largest gain in October, each adding 2,000 jobs; mining and logging increased by 1,300 jobs; financial activities added 500 jobs; and information services gained 400.
The largest year-over-year gains were in construction, up 7,900 workers; private education and health services increased 6,900; and 5,900 jobs were added in leisure and hospitality, which lost 1,900 jobs in October.
In October, unemployment rates increased in 26 states while the lowest monthly rates were in Maryland, at 1.7%, and North Dakota at 1.9%. Nevada reported the nation's highest unemployment rate of 5.4%.
Graphs and information about the Arkansas and U.S. joblessness rates.