Arkansas’ jobless rate stalls at 3.2% as state’s labor pool faces recessionary pressures
August 1-7, 2022
By Wesley Brown
Even though Arkansas’ unemployment rate is just one basis point off its record low of 3.1%, employers in all sectors across the state are still struggling to return to pre-pandemic job levels as thousands of Arkansas workers still remain on the sidelines.
Through the first half of 2022, Arkansas’ unemployment rate remained at 3.2% for the third straight month as the civilian labor force rose by 2,738, a result of 2,050 more employed and 688 more unemployed Arkansans, according to labor force data compiled by the U.S. Bureau of Labor Statistics (BLS) and released each month by the state Division of Workforce Services (DWS).
Despite the low jobless rate and a steady flow of new jobs added to state payrolls each month, the state’s civil labor pool of 1,354,780 is well off the 1,386,748 workers eligible to work heading into the pandemic in March 2020.
“Employment in Arkansas has increased for six consecutive months, with an additional 2,050 employed in June. While more Arkansans are employed, the gains were not enough to affect the unemployment rate. Arkansas’ jobless rate has remained stable at 3.2% since April 2022,” said Susan Price, operations manager of the state’s BLS program.
That near-record Arkansas unemployment rate, which closely mirrors the national jobless rate at 3.6%, does not provide a full picture of the labor force participation rate, which is the total number of people seeking work as a percentage of the total population. According to BLS data, Arkansas’ labor force participation rate at the end of June was 57%, compared to the national average at 62.2%.
A new survey by the Conference Board offers some insight into the high number of employees who are leaving the workforce because they are dissatisfied with their current position. Key findings from the survey released on July 14 show that the so-called “Great Resignation” is not over as 31% of workers are looking for new jobs.
“Despite worries of a recession — and the hiring slowdown and layoffs that often result from a downturn — the labor market remains strong. And this robust job market is continuing to empower workers,” said Rebecca Ray, executive vice president of human capital at The Conference Board. “Our survey results reveal they continue to want more flexibility and higher pay, and they’ll go elsewhere to attain these benefits. But slowing economic growth makes the decision to jump ship riskier. To retain talent, companies should work with their employees to determine to what extent they can accommodate their needs.”
Closer to home, the National Federation of Independent Business’s (NFIB) monthly job market barometer shows that small business owners in Arkansas and across the nation are not excited about the current state of affairs market. Through June 2022, the NFIB’s “optimism index” dropped 3.6 points to 89.5, marking the sixth consecutive month below the 48-year average of 98.
Small business owners expecting better business conditions over the next six months decreased seven points to a net negative 61%, the lowest level recorded in the 48-year survey. Expectations for better conditions have worsened every month this year, NFIB officials said.
Inflation continues to be a top problem for small businesses with 34% of owners reporting it was their single most important problem in operating their business, an increase of six points from May and the highest level since quarter four in 1980.
“As inflation continues to dominate business decisions, small business owners’ expectations for better business conditions have reached a new low,” said NFIB Chief Economist Bill Dunkelberg. “On top of the immediate challenges facing small business owners including inflation and worker shortages, the outlook for economic policy is not encouraging either as policy talks have shifted to tax increases and more regulations.”
Although state-specific data is unavailable, NFIB Arkansas Director Sylvester Smith offered a similar snapshot of the state’s job sector and business climate through the first half of 2022.
“Small business has segued from the pandemic to a labor shortage and supply chain disruptions and then to a spike in fuel prices and inflation,” said Smith. “Owners are frustrated, but they’re determined to get through this, to keep the doors open and continue serving their communities.”
Also, in a recent second-quarter earnings conference call with Wall Street analysts, Bank OZK Chairman and CEO George Gleason noted that the Little Rock regional bank had been steadily hiring over the past several weeks and looking to add several hundred new positions to support future growth.
“I’m pleased to report, we really have had a good momentum in the last five or six weeks adding staff, and have probably added net 100-plus positions over that last 6-week period of time,” Gleason said. “So, we’re finally getting this logjam of unfilled positions flowing at a really nice rate.”
Still, Gleason said the fast-growing Arkansas regional bank, which has assets of nearly $26 billion and a total employee count of about 2,500, still has some 225 to 250 open positions.
“We normally will have 3% or 4% of our staff positions open because we’re looking for candidates with specific [talents]. So, I would say we’re 125 to 150 positions remaining to be filled that would need to be filled to get as to what we would consider a normal level of open positions. So, fairly significant hiring still to go,” Gleason told analysts during the July 22 earnings conference call.
The longtime Bank OZK chairman said job openings across the bank’s 240 offices in eight states include some existing positions and “quite a few newly created positions.”
“And those positions are there because we expect to continue to grow and actually see an acceleration in our balance sheet growth in [2023] and [2024],” said Gleason. “We’re glad to have our business in a position where we feel confident enough about growth over the next couple of years to still be adding new positions to manage that growth.”
Photo Caption:
1. Arkansas’ unemployment rate remains at 3.2% for the third month as the civilian labor force rose from 2,738 workers to 1,354,780.
