State jobless rate hit 4.2% last month; Arkansas’ figure 9th-lowest in U.S.

Arkansas’ unemployment rate dropped more than 2 percentage points in December to 4.2%, the second-best improvement in the nation, bringing the state much closer to pre-pandemic jobless figures. The December 2019 state jobless rate was 3.5%.

The improvement also gives Arkansas the nation’s ninth-lowest unemployment rate, according to a national organization that monitors jobless figures. Statewide unemployment is 2.5 points below the national rate of 6.7% in December, state officials announced Tuesday.

Gov. Asa Hutchinson said Tuesday that he is “obviously very pleased” with the gains. The state’s jobless rate has gradually improved during the pandemic from a high of 10.8% in April.

“Each month it’s come down and then we had this dramatic decrease in December,” the governor said in a news conference centered on covid-19.

The Arkansas Division of Workforce Services reported that the state’s civilian labor force increased 38,904, with 65,543 more Arkansans employed and 26,639 fewer unemployed. The change “reflects the cumulative impact of recent hiring, as more Arkansans report they are currently employed,” said Susan Price, who manages workforce data for the state.

The governor also noted the improvement and credited it to efforts to keep the economy rolling during the covid-19 crisis. “This reflects the balance that we’ve tried to achieve in keeping our economy moving and keeping people employed,” Hutchinson said.

Analysis by state economist Michael Pakko and a national monitoring organization showed striking improvements in Arkansas. Pakko said Arkansas’ 2.1% drop was second best in the nation, following only New Jersey, which recorded a 2.7% decrease from November to December.

WalletHub, a personal financial service, noted that Arkansas has the ninth-lowest unemployment rate in the nation at 4.2%.

“The significant drop in Arkansas’ unemployment rate from November to December is a reassuring sign that employers are hiring again and more Arkansans are going back to work,” said Secretary of Commerce Mike Preston.

“While these numbers are very positive we do know there are still many who are unemployed or have dropped out of the labor pool. We have more work to do to get us back to pre-pandemic levels, but we are on the right track.”

Compared with December 2019, nonfarm payroll jobs in Arkansas are down by 33,900. From November to December of 2020, however, nonfarm payroll jobs increased 2,600, with five sectors suffering job losses, three registering increases and three others showing no change.

The sharp jobless decline in December “provides further evidence an economic recovery is underway,” said Greg Kaza, executive director of the Arkansas Policy Foundation.

Trade, transportation and utilities showed the biggest increase in December, gaining 3,700 jobs. Within that sector, retail trade added 1,900 jobs in December, and it has gained a net of 8,900 jobs from February-December as it weathered the pandemic.

Transportation and utilities gained 4,400 jobs from February-December, professional and business services added 3,800 jobs and construction added 1,200 jobs during the same period.

Leisure and hospitality, the hardest-hit sector across the nation, lost 13,900 jobs from February-December in Arkansas and manufacturing dropped 12,600 workers.

The continued improvement in the unemployment rate throughout the year indicates “every [economic] component was moving in the right direction,” Pakko said Tuesday.

“The real story here is how [the decline] fits into the experience of the past several months,” Pakko said. “We didn’t experience as much of a downturn as other states, and we’ve been recovering pretty robustly.”

Arkansas’ economy never shut down during the pandemic, and the decision to enforce limited business restriction has added to the rebound, analyst Jill Gonzalez with WalletHub said Tuesday.

“Currently, Arkansas’ unemployment rate is 4.2%, the ninth-lowest in the U.S.,” she said. “One of the reasons for this is that the state has begun reopening, and is among those with the fewest coronavirus restrictions.”

Besides commenting during the news conference, the governor issued a statement addressing the unemployment improvement.

“The coronavirus knocked the wind out of our sails for a moment, but the strong economic foundation we had built before the pandemic held firm, as I knew it would, and now a robust recovery is in sight,” he said in the statement. “The falling unemployment rate combined with the $319 million more than we expected in state revenue for fiscal year 2021 are signs that we have taken the right steps to limit the economic damage of covid-19.

“This news does not soften the blow of the human toll on our state. We must continue to do everything we can to stop the spread of the virus and to come to the aid of the thousands of Arkansans who have lost loved ones to this disease.”

Read the full article on the Northwest Arkansas Democrat-Gazette website here.