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The Unfortunate Reality of Arkansas’ Fortunate Jobs Report

Updated: Apr 13

The Arkansas Department of Workforce Services has released the latest jobs numbers for the state and they just couldn’t be happier with themselves.  The Arkansas unemployment rate has dropped to 7.2%!  This is great news for our economy, right?  A real recovery!  Max Brantley hasn’t been this excited since Mark Martin got elected.

But let’s dig a little deeper into these employment numbers and see what we find.

In their press release, DWS says:

Arkansas’ civilian labor force increased 500, a result of 3,300 more employed and 2,800 fewer unemployed Arkansans.  The United States’ jobless rate declined one-tenth of a percentage point from 8.2 percent in March to 8.1 percent in April.

The release also touts gains in Leisure and Hospitality (mostly seasonal jobs and food services), Educational and Health services, and in Trade, Transportation and Utilities in April 2012.  And of course there is one other sector of the economy that is always booming–government.  Since April 2011, local governments in the state have added 4,800 jobs.

But, as often happens with these types of government reports, things aren’t exactly as they appear.  Despite the report’s indication that the Trade, Transportation and Utilities industry is growing (+600 last month), we are still 2,500 behind where we were last April.  And despite the claim that Total Nonfarm Payroll Jobs “increased 6,100,” we are still 5,400 jobs in the hole from where we were a year ago.

Other major industries have seen declines in the past year as well:

  1. Manufacturing: (-5,000)

  2. Professional & Business Services: (-5,500)

  3. Construction: (-2,400)

It is certainly convenient for DWS to be able to categorize these ‘new jobs’ as growth for the state’s economy–but where is the growth?  If we still have a net loss of jobs in several major industries, have we really grown or are we simply slowly recovering lost ground?

You should also know that the real unemployment rate in Arkansas is closer to 9% due to the number of people who have given up looking for work, according to the Bureau of Labor Statistics.

In their U-4 scoring of the states’ unemployment rates, BLS defines as “persons who are not in the labor force, want and are available for work, and had looked for a job sometime in the prior 12 months.”  They score Arkansas at 8.9%.  U-5 includes those who haven’t looked for work in 4 weeks, putting Arkansas at 9.7%–the national average for U-5 is 10.2%.

I certainly do not wish to be Debbie Downer, but a little bit of reality never hurts.  Unfortunately, despite what you will read in most of the media, Arkansas’ economy remains stagnant and people continue to quit their search for work.

We can only hope that legislators will adopt pro-growth policies in the next general session that will spawn some real growth in our state.

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