In the latest report on state-level employment and unemployment, the household survey shows continuing employment growth and a downtick in the unemployment rate. However, the payroll survey shows a fairly sharp monthly decline.
The unemployment rate declined from 4.2% in May to 4.1% in June. The U.S. unemployment rate was previously reported to have declined from 4.3% to 4.2%. Arkansas continues to closely track the national unemployment rate.
The underlying components of the unemployment rate all continued to show positive trends. The number of unemployed was down by 911—the fifth consecutive monthly decline. Meanwhile, the number of employed continued an increasing trend, as did the total labor force.
Payroll Employment
In contrast to the household measure of employment, nonfarm payroll employment declined in June. Total employment dropped by 2,200 to 1,343,000–the lowest reading for Arkansas nonfarm payrolls since November 2025 (seasonally adjusted data).
Employment in goods-producing sectors increased in June, while the weakness was concentrated in service-providing sectors—many of which have been driving positive employment growth in recent months. The largest decline was in Educational & Health Services; however, the drop was entirely attributable to Educational Services. Health Care & Social Assistance was basically unchanged for the month (+100). Wholesale Trade, Retail Trade, and Financial Services were all down.
Compared to June of 2026, total payroll employment was up by 4,700, representing a year-over-year growth rate of 0.4%. Over the same period, U.S. payrolls expanded by only 0.3%. Both state and national payroll growth have been steadily slowing over time, with growth rates of less than 1.0% since at least the early months of 2025.
The contrast between short term movements in household employment and payroll employment continue to present a puzzle. The two measures can deviate significantly over relatively short time periods, but we expect them to reflect common trends over time and with data revisions. The question is, therefore, is household employment overstating growth, or is payroll employment understating it? We will continue to monitor these developments.
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Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE.