Arkansas Economic Development Institute

Metro Area Employment and Unemployment – June Update

By , July 30, 2010 2:21 PM

June data for metro area employment and unemployment came out earlier this week (see Metropolitan Area Employment and Unemployment Summary from the BLS).  According to the raw numbers—not seasonally adjusted—unemployment rates were unchanged or higher in each of the state’s metropolitan statistical areas (MSAs).   However, June is typically a month in which unemployment ticks upward for purely seasonal reasons.   One factor:  teachers and students are off for the summer, and students in particular are reported as being unemployed if they are seeking, but fail to find summer jobs.** 

After accounting for these recurrent patterns, seasonally adjusted statistics paint a much brighter picture.  Unemployment rates fell in every one of the state’s MSAs.  In many cases, the declines were substantial.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Employment statistics for June (seasonally adjusted by the BLS) showed that payrolls fell in most of Arkansas’ MSAs.  Employment was down by 0.1% in Fayetteville, down 0.9% in Fort Smith, down 0.6% in Little Rock, down 0.4% in Memphis and down 1.1% in Pine Bluff.   Employment was unchanged in Jonesboro, but was up by 0.3% in Hot Springs and up 0.2% in Texarkana.

Cumulative job losses in the state’s MSAs since the start of the recession have varied considerably.   The chart below shows the percentage decline for each MSA since December 2007.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Jonesboro has lost the fewest jobs:  total losses reached a peak of 2.2% in April but have recovered over the past two months.  Similarly, Texarkana has come back from a cumulative loss of 3.3% in December of last year to a total loss of only 1.2% as of June.  Hot Springs losses totalled 6.7% in April, but have bounced back to within 3.8% of the December 2007 level.  Employment in the remaining MSAs is at or near recent low points, having yet shown little sign of recovery.

#   #   #

**The June 2010 issue of Arkansas Labor Market, from the Department of Workforce Services, includes a feature article describing some of the reasons that employment data show seasonal fluctuations.

Arkansas Employment and Unemployment – June 2008

By , July 20, 2010 11:10 AM

The latest information on Arkansas employment and unemployment was released by the U.S. Bureau of Labor Statistics and the Arkansas Department of Workforce Services this morning.  The reports indicate that the employment situation in Arkansas is continuing to improve.

The unemployment rate dropped by two-tenths of a percent, falling to 7.5 percent in June.  The number of unemployed fell by 4,100 to 100,943.  This is the lowest reading since the number of unemployed first topped 100,000 in June of 2009.   The unemployment rate would have fallen further had it not been for a contraction in the size of the labor force.   The labor force declined by more than 8,000 in June, following three months of previous declines.  The most obvious explanation for this phenomenon is an increase in the number of “discouraged workers” who have given up looking for employment–at least for the time-being.   Overall, however, the news from the June employment report should serve as a reason for more encouragement going forward.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The payroll survey for June showed a healthy rate of job-creation:  Nonfarm payroll employment increased by 6,000 jobs (seasonally adjusted).  Since December of last year, payroll employment has risen by 11,400 and it is up by 4,200 from a year ago.  From the low-point for employment measured in February 2010, the number of jobs has increased by more than 15,000.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Recent data have shown employment gains in some of the key sectors for the Arkansas economy:  Manufacturing employment was up by 1000 jobs, and has now increased for five consecutive months.  Employment in Trade, Transportation and Utilities edged up by 800 jobs in June, recovering the job losses from earlier in the year.  Employment in Education and Health services resumed a healthy pace of job creation, increasing by 4,500 jobs in June.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Interpreting the growth in public sector employment is complicated by seasonal patterns and changes in the Census Bureau’s employment of temporary workers.  On a not-seasonally-adjusted basis, government employment was down by 4,700 jobs, with an 1,800 decline in Federal Government employment largely attributable to the winding-down of Census Bureau employment.  However, much of the decline in state and local government employment was related to typical fluctuations in public school employment.  After taking account of this school-year phenomenon, seasonally adjusted employment by government entities increased by 1,800  (with federal government employment down by 2,100 jobs and state & local employment up by a total of 3,900 jobs).

#  #  #

*Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the monthly press release from the Arkansas Department of Workforce Services, are available here
Table – Seasonally Adjusted NFPE.

Is the U.S. Economy Facing a “Double-Dip” Recession?

By , July 16, 2010 3:41 PM

Earlier this week, I was quoted on Talk Business.net as questioning the relevance of a “double-dip” recession.  There are several reasons that I take that position.

First, The Business Cycle Dating Committee at the National Bureau of Economic Research has laid out clear criteria for defining a recession.  They cover a broad range of economic measures, including production, income and employment–not just quarter-to-quarter movements in GDP.  In fact, the Business Cycle Dating Committee has never defined or declared that we’ve seen a double dip recession.  The chair of the Committee, Dr. Robert Hall has recently referred to the recessions of 1980 and 1981 as the closest thing he’s seen to a “double-dip,” yet the Committee decided at the time to define two separate recessions  (See A ‘Double-dip’ Recession Defined).

Another reason that I question the current danger of a double-dip recession is that most economic indicators continue to show a moderate rate of recovery in the economy.  The buzz about a double dip recession seems to have intensified following the release of the June employment report, which was somewhat weaker than expected.  It is never wise to put too much emphasis on one month’s data, and in this case it can be misleading.  As shown in the chart below, private-sector employment has shown increases in each of the past six months. 

Source:  Bureau of Labor Statistics.

Source: Bureau of Labor Statistics.

Total employment has been subject to fluctuations in Government employment due to the hiring of temporary workers by the Census Bureau.  When the report on May employment came out, many media sources pointed out that the strong monthly showing was entirely due to Census hiring, with private sector employment falling.  Subsequent revisions to the data now show that private sector employment did increase in May, albeit only slightly.

One of the reasons that the June employment report looked so discouraging was that the Census Bureau laid off many of the workers it had hired in earlier months, so that total employment declined, on net.  Yet private sector hiring showed its sixth consecutive month of increase.

Evidence from previous recessions–particularly the two most recent recessions–shows that employment tends to be a lagging indicator, picking up only slowly during the early stages of an economic expansion.  So far, we’ve seen total growth of about 900,000 jobs during 2010.  This is not consistent with a robust rebound, but it does indicate a clear sign of a turnaround in the job market. 

Meanwhile, the other key indicators that are considered by the Business Cycle Dating Committee–industrial production, real income growth, and total sales–are all showing patterns of renewed strength since the middle of 2009.  The economy is recovering, but it’s looking like this recovery will follow a pattern similar to the last two “jobless recoveries.”

Panorama Theme by Themocracy

AWSOM Powered