Institute for Economic Advancement

Metro Area Unemployment – 2011:Q1

By , April 28, 2011 4:52 PM

The latest unemployment rate figures for Arkansas metro areas provide another example of the importance of considering seasonal patterns when analyzing month-to-month data.  The raw, not-seasonally adjusted data released yesterday by the Bureau of Labor Statistics show unemployment rates declining between February and March for each of Arkansas’ metropolitan statistical areas (MSAs).  However, it is typical for March that unemployment rates decline:  Economic activity generally begins a seasonal resurgence in the spring, so unemployment rates tend to decline.  If we seek to look beyond routine seasonal changes in the data to discern longer term trends and changes associated with the business cycle, it is helpful to consider seasonally adjusted figures.

As shown in the table below, the not-seasonally adjusted unemployment rate for Arkansas fell from 8.7% in January to 8.4% in Feburary, then to 8.0% in March.  Yet, the seasonally adjusted figures show that the unemployment rate was steady at 7.8% for those three months.  The decline from January to March was entirely seasonal in character, indicating nothing to suggest that the economic recovery was resulting in lower unemployment.  Similarly, the not-seasonally adjusted data for Arkansas’ MSAs show declining unemployment rates across the board.  But to what extent were those changes purely seasonal?

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

The seasonally adjusted data show that a portion of the lower unemployment in February represented a true decline.  The data show that unemployment rates declined in five MSAs, remaining unchanged or rising in the other two.  In March, however, seasonal factors were more important.  The not seasonally adjusted data show lower unemployment rates for all seven MSAs while the seasonally adjusted figures show higher unemployment in all seven.   So, why did unadjusted unemployment rates decline in March?  Because it was March.

 Beyond the month-to-month uncertainty associated with seasonal factors, metro area data are also more variable than the state-level or national data.  Hence, it is even more important to view MSA data from a longer term perspective.  With this consideration in mind, the figure below shows quarterly average unemployment rates for Arkansas MSAs.  Rates declined slightly in the spring of 2010, but then rose during the second half of the year (partly as a result of temporary Census workers being idled).  In nearly all of Arkansas’ MSAs, unemployment appears to have peaked in the fourth quarter of 2010 and declined in the first quarter of this year.  By way of comparison, the seasonally-adjusted unemployment rate for the state as a whole was 7.9% in 2010:Q4 and 7.8% in 2011:Q1.

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Arkansas Employment and Unemployment – March 2011

By , April 19, 2011 10:18 AM

Arkansas’ unemployment rate remained unchanged at 7.8% in March (seasonally adjusted).  The latest data from the Bureau of Labor Statistics and Arkansas Department of Workforce Services show that the number of unemployed rose slightly, but the number of employed rose by nearly 4,400.  The change in March represents the eighth consecutive month of increases.

The household survey and the establishment survey can sometimes provide conflicting signals.  However, the two surveys have recently been presenting a consistent picture of the Arkansas employment market.  As shown in the figure below, both measures have generally  been rising since the beginning of 2010.  The household survey shows employment up by over 21,000 since December of 2009.  Meanwhile the payroll survey shows employment up by about 24,600 since that series hit a trough in February 2010.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The latest reading on nonfarm payroll employment shows the number of jobs up by approximately 3,200 in March (seasonally adjusted).   Monthly losses were recorded in several service-providing sectors, including two of the areas that have shown the most strength during the recovery, Education and Health Services, and Business and Professional Services.  Construction and Manufacturing both showed increases for the month, but employment in these goods-producing sectors is down from a year ago.  Total government employment is also down from a year ago, with lower Federal government employment relfecting (in part) the temporarily high Census Bureau employment of spring 2010.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

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*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

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