Steep increase reported in Arkansas job numbers; December jobless rate falls to 4.2%

Arkansas employers added more than 65,000 jobs between November and December, pushing the state’s jobless rate down from 6.3% in November to 4.2% in December, according to Tuesday’s (Jan. 26) report from the U.S. Bureau of Labor Statistics (BLS).

The number of employed in Arkansas during December was an estimated 1,303,673, down 12,396 jobs compared with December 2019. The year-over-year job losses are down considerably compared to the 78,011 jobs between November 2019 and November 2020.

December employment was up 65,543 jobs compared with November, a jump of 5.2%. The biggest sector gainers between November and December were Professional & Business Services with 3,400 more jobs and Trade, Transportation & Utilities with 2,000 more jobs. The December numbers are preliminary and subject to revision. The report marked the ninth full month of COVID-19 impacts on the economy.

“The steep monthly decline in the unemployment rate, coupled with growth in payroll employment since 2Q-2020 provides further evidence an economic recovery is underway,” noted Greg Kaza, an economist and executive director of the Arkansas Policy Foundation.

QUESTIONS ABOUT THE REPORT
However, Michael Pakko, chief economist and state economic forecaster at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock, is not convinced the December report is accurate.

“In fact, the unprecedented magnitudes of changes in the number of employed, unemployed and the labor force suggests that some measurement uncertainty should be taken into consideration when interpreting the report,” Pakko noted in a statement to Talk Business & Politics. “Throughout the pandemic, the BLS has reported misclassification problems regarding the status of workers on temporary layoff. It is likely that these survey problems were a factor in the December results. Nevertheless, the payroll survey results corroborate a view of improved labor market conditions in December, so today’s report is overwhelmingly positive, even if the celebration of a return to full employment is probably premature.”

Mervin Jebaraj, director of the Center for Business & Economic Research at the University of Arkansas, said the BLS report raises questions considering a payroll report that shows 4,300 new jobs between November and December and recent increases in unemployment insurance claims.

“I am not sure what to make of that (BLS) number except to wait for revisions,” Jebaraj said.

The state’s labor force – the number of people eligible to work – was 1,360,897 in December down slightly compared with the 1,364,255 in December 2019, but up 2.9% from the 1,321,993 in November.

Arkansans without jobs in December totaled 57,224, up 18.7% from the 48,186 in December 2019 but well below the 83,863 unemployed in November. The state reached a peak of those without jobs of 140,898 in April. Sectors with the biggest year-over-year losses were Manufacturing (14,300 jobs lost) Leisure & Hospitality (down 13,900), and Government (down 9,600). The biggest job gainer was Trade, Transportation and Utilities with 12,200 more jobs year-over-year.

The BLS report noted that 45 states had jobless rate increases from a year earlier, one state had a decrease, and four states had little or no change. Hawaii and Nevada had the highest unemployment rates in December at 9.3% and 9.2%, respectively. Nebraska and South Dakota had the lowest rates at 3% each.

Read the full article on the Talk Business & Politics website here.