Jobless rate rose to 5.1% in May
Posted on Saturday, June 21, 2008
Arkansas’ unemployment rate increased to 5. 1 percent in May from 4. 7 percent in April, the U. S. Bureau of Labor Statistics said Friday.
It was an increase that economists had been expecting, since Arkansas began a three-month decline in unemployment in February.
Arkansas’ jobless rate dropped in February to 5. 0 percent from 5. 6 percent in January, then fell to 4. 9 percent in March and 4. 7 percent in April.
The increase in the unemployment rate in May confirmed what he had expected, said John Shelnutt, the administrator for economic analysis and tax research for the state’s Department of Finance and Administration.
Shelnutt and other economists said in recent months that they saw no solid reason why Arkansas’ unemployment rate declined in monthly reports earlier this year. Shelnutt has said in the past that he prefers to rely on quarterly unemployment numbers rather than the more volatile monthly report.
May’s increase wasn’t quite as big a jump as he expected, he said.
“The national [unemployment ] rate went up by fivetenths of a percentage point,” Shelnutt said, referring to the U. S. rate of 5. 5 percent in May compared with 5. 0 percent in April.
Arkansas’ unemployment rate still is better than it was in May 2007, when it was 5. 4 percent, said Cheryl Abbott, a regional economist with the Bureau of Labor Statistics in Dallas.
“And that is quite a bit different than the national trend,” Abbott said, noting that the national jobless rate was 5. 5 percent in May, up from 4. 5 percent in May 2007.
Arkansas also is faring better than its neighbor states to the east. Both Mississippi and Tennessee reported a full 1 percentage point increase in May compared with April, with Mississippi’s rate at 6. 9 percent and Tennessee’s at 6. 4 percent.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville, said one advantage Arkansas has over Mississippi and Tennessee is the growth of natural gas exploration in the Fayetteville Shale, which covers much of north-central Arkansas.
“You can’t forget the significance of that,” Deck said.
The natural resources and mining sector has grown by 1, 200 jobs in the past 12 months, which can be attributed to the Fayetteville Shale, Deck said.
But employment growth because of drilling in the Fayetteville Shale affects more than just that one sector, Deck said.
“It shows up in terms of construction, transportation, even business services,” Deck said. “It’s showing up everywhere, even though you can’t point to it.” Michigan, with its suffering automobile industry, continued to have the highest unemployment rate in the country at 8. 5 percent, up 1. 6 percent from April. South Dakota and Wyoming had the lowest employment rates at 2. 9 percent each.
Two monthly surveys of Arkansans are used in calculating the state unemployment rate, as well as information taken from unemployment claims.
The main input comes from a poll of about 870 households in the state, in which each adult is asked if he did any work in the month or if he was out of work or looking for work.
A more extensive survey of 3, 000 to 3, 500 businesses across various industries also is conducted each month. It indicates the number of full-time or parttime jobs at each business.
B oth surveys are much smaller than the research done on a national level. Therefore each state’s unemployment statistics are not as accurate and are more volatile than national unemployment figures, Abbott said.
Eight of 11 Arkansas industry sectors reported an increase in jobs in May as compared to April.
The leisure and hospitality sector added 1, 500 jobs, partially because of parks and tourism establishments hiring workers for the summer.
The trade, transportation and utilities sector grew by 1, 200 jobs, with retail trade accounting for 800 of those.
Construction, which has been in decline for the past year, increased by 1, 000 jobs in May, with half those jobs in specialty trade construction. Even with the increase, construction is down 1, 500 jobs in the past 12 months.
The professional and business services sector added 600 jobs to reach an all-time high of 119, 000. Two categories within the sector reported opposite statistics. The administrative and support services category, which includes call centers, grew by 1, 300 jobs, but the high-salaried professional, scientific and technical category lost 800 jobs. A third category within the sector, management of companies, added 100 jobs.
There were 300 jobs added in financial activities, 200 in information and 100 in the natural resources and mining sector. Other services added 300 jobs.
The biggest decline was in government, which lost 700 jobs.
The educational and health services sector dropped 300 jobs.
Manufacturing lost 100 jobs in the one-month period; it is down by 7, 000 jobs since May last year.
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