Arkansas Employment and Unemployment – September 2010

By , October 22, 2010 11:10 AM

This morning’s employment report from the U.S. Bureau of Labor Statistics and the Arkansas Department of Workforce Services showed that the labor market weakness recently evident in the national economic statistics is affecting Arkansas as well.   The new report showed that the number of unemployed Arkansans increased by nearly 1,900 in September.   As a result, the unemployment rate rose by two-tenths of one percent to 7.7%.  

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Once again this month, it is important to consider seasonal patterns when evaluating the data on payroll employment.  Without seasonal adjustment, the number of jobs counted in the payroll survey rose by more than 10,000.  However, as shown in the chart below, September is typically a month where employment expands sharply.   After adjusting for this recurring seasonal pattern, employment declined by 4,900.  When it comes to evaluating month-to-month job growth, the seasonally-adjusted data provide a more meaningful basis for comparison.  In fact, the inconsistency between comparing seasonally-adjusted household unemployment with not-seasonally-adjusted payroll employment is particularly evident in the data for September.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Some of the job losses over the past two months have been attributable to the lay-off of temporary Census workers.  As shown in the table below, Government employment declined by 2,400 in September.   Other important sectors showing job losses in September include Trade, Transportation, and Utilities; Construction; and Manufacturing.   Growth in manufacturing employment earlier in the year had been an encouraging sign.  But after six consecutive months of increase, employment in manufacturing has now declined in both August (-1,200) and September (-1,300).

Employment in service-providing sectors fared somewhat better in September.  Professional and Business services, Leisure and Hospitality Services, and Other Services showed seasonally-adjusted increases in September.  The Leisure and Hospitality category is another example where seasonal adjustment matters.  Typically, firms in this sector scale back after Labor Day.  Consequently, not-seasonally-adjusted employment in this sector actually declined by 1,200 jobs.  But this is a smaller decline that would usually be expected for the month.  Hence, after seasonal adjustment, employment rose by 300.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Sluggish job growth has been distinct characteristic of the current economic recovery–both in Arkansas and nationwide.  Recent data show increasing weakness in job growth.  Two factors are relevant:  First, the inventory correction that helped to boost production-related jobs earlier in the year appears to have largely run its course.  In addition, the direct effects of Federal stimulus programs have dissipated somewhat.  We are now in a period in which the economy is transitioning toward a lasting, self-sustaining recovery.  Employment growth is sure to pick up when these transitions are complete.  The key question is how long they will take.

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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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