Arkansas' seasonally adjusted unemployment rate declined to 6.2% in October from 7.2% in September, the state Department of Workforce Services reported Friday.
The department revised September’s estimate down from the 7.3% it originally reported.
Friday’s report also said that, in October, Arkansas' civilian labor force decreased by 12,370 people.
The U.S. jobless rate also declined in October, to 6.9% from 7.9% in September.
In its monthly report, the Department of Workforce Services said Arkansas’ sharp decline was the result of a decline in the number of unemployed Arkansans.
Michael Pakko, an economist at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock, said that while the state’s unemployment rate had been trending downward, he was surprised by how much it declined in October.
“It seems like, last month, it was kind of quirky that it didn't drop at all, so it made up for it in the statistics this month,” he said.
Pakko told Arkansas Business that the state’s labor force participation rate — the percentage of Arkansans age 16 and up who are either working or looking for work — was in decline before the pandemic, and the same was true nationally.
Generally, people who stop looking for work after four weeks are not counted as part of the state’s labor force. People who are going to school or are retired are also not included.
“Our labor force participation rate has fallen by nearly two percentage points, but that's smaller than the nationwide drop, so there's certainly some of those people who are likely to have dropped out of the labor force permanently — either early retirement kicked in or they will not come back to the labor force for one reason or another," Pakko said.
In all, about 36,000 people have left Arkansas’ labor force since February, Pakko said, with most dropping out in March and April during the earliest weeks of the pandemic.
“There's been an awful lot of volatility in that measure over the past several months,” he said. “The average change from month to month since February has been 1.2 percentage points either up or down. So we've seen some big swings, and that's probably because it’s difficult to measure this in this very rapidly changing environment.”
Compared to October 2019, nonfarm payroll jobs in Arkansas are down by 42,600. Eight major industry sectors posted job losses and three posted gains:
- Manufacturing declined by 16,200 jobs, with reductions in both durable goods (-10,400) and nondurable goods (-5,800).
- Jobs in leisure and hospitality fell by 15,400, with the most contraction being in food services (-11,700).
- Government lost 8,600 jobs, in local (-8,100) and state(-1,900) government.
- Educational and health services lost 7,700 jobs, all in health care and social assistance.
- But jobs in trade, transportation and utilities increased by 9,500, with the most growth being seen in retail trade (+5,600) and transportation-warehousing-utilities (+3,700).
- Reductions occurred in other services (-3,900) and financial activities (-1,900).
- Professional and business services added 1,800 jobs.
- Construction gained 1,200 jobs.
- Mining and logging lost 800 jobs, while Information lost 600.