Unemployment continues to drop in Arkansas with the state reporting Friday that the joblessness rate fell from 4% in September to 3.7% in October, the lowest since January 2020 and nearly a full point below the U.S. rate of 4.6%.
Arkansas' Division of Workforce Service reported a decline in the unemployment rate for the second consecutive month. The report said the state's labor force decreased 4,130, with 3,756 fewer employed and 374 fewer unemployed Arkansans.
The United States' jobless rate declined two-tenths of a percentage point from 4.8% in September to 4.6% in October.
Job gains in Arkansas are trending upward though the state's labor force is shrinking, which is making it difficult for employers to fill jobs, Gov. Asa Hutchinson said in a statement released Friday.
"The drop in our unemployment rate down to 3.7% is another sign of our booming economy, but the decline in our workforce numbers emphasizes that the greatest need of our economy is more workers," the governor said. "Arkansas is leading the national recovery, and I am confident the recent economic development victories in our state will keep us on a fast track." This year the state has signed incentive agreements with 31 new or expanding companies, which are projected to create 2,466 new jobs with an average wage of $20.78, according to information compiled by the Arkansas Economic Development Commission. Those companies estimate they will invest $674.2 million to expand in Arkansas. One of the largest projects this year is Trex Co.'s plan to create 500 jobs in Little Rock and build the company's third U.S. site.
The state's leading economic development officer and chief economist praised the upbeat unemployment report Friday.
"It's always good news when the unemployment rate drops," Commerce Secretary Mike Preston said Friday. "Overall, this is good news and what we like to see." The three-tenths of a point drop from September to October is significant progress, according to Michael Pakko, chief economist with the Arkansas Economic Development Institute.
"A big number of unemployed found jobs and payroll employment was up as well," Pakko said Friday. "It was a good month of recovering job markets." All major business areas, except for one, posted job gains from September to October and the loss recorded in financial services was just 100 jobs. Key sectors wracked by the pandemic -- health services and leisure and hospitality -- gained jobs from September to October.
"Overall, the job trend is going in the right direction," Pakko said. "There were some pretty good gains in those sectors that were impacted the most by the lockdowns and the recession." Educational and health services picked up 1,300 jobs month-to-month and leisure and hospitality added 1,400 workers.
"This is a slow but steady decline from where we were at the height of the pandemic," Preston said, referring to an Arkansas unemployment rate of 10% in April. "Some of the key industry sectors we like to see improve showed gains." Regarding sector improvements, goods producing gained 1,500 jobs, service providing added 10,600 workers, other services (which includes government) increased by 900 and information services was up by 200 jobs, dragged down by the 100-job loss in financial activities.
Total nonfarm payroll employment gained 12,100 jobs in October.
Arkansas' job market, characterized by a declining labor pool with increasing job openings, is stretching employers thin, according to statistics from the Federal Reserve regional bank in St. Louis.
"With a low, low unemployment rate and a really tight labor market, as a result, there is a real demand for workers across Arkansas as a whole," Nathan Jefferson, a Fed economist who follows the region that includes Arkansas, said Friday.
In September, there were 0.6 unemployed Arkansans per job opening in the state, indicating there are more jobs available than workers to fill them, according to the most recent data compiled by the Fed. Across the U.S., there were 0.7 unemployed Americans per job opening.
In the region, Tennessee's unemployed-to-job-openings ratio was 0.6 along with Missouri and Kentucky. Mississippi's ratio was 0.9.
The state has multiple training programs to prepare those ready to work, Preston said.
"We have a ways to go with our labor pool but we're getting there," he added. We can offer help with training programs ... to those who want to come back in, and we'll help them get the training they need to get into a job or get into a better paying job." From year to year, October 2020-2021, Arkansas' nonfarm payroll jobs increased by 32,300.