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State jobless rates drop to 4.9 percent after revisions Wednesday, Nov 16, 2005 By Wesley Brown Arkansas News Bureau LITTLE ROCK - Arkansas' unemployment rate dipped below 5 percent in October as the total employment across the state rose by 11,400 workers, state labor officials reported Tuesday. The jobless rate, produced each month by the U.S. Labor Department's Bureau of Labor Statistics and released by the state Department of Workforce Services, fell by two-tenths of a percentage point to 4.9 percent last month. However, the decline in the seasonal adjusted rate is spurring some economic experts to question the reliability and accuracy of the nation's labor force data. "Statistics can be shaped into what you want them to say," said Greg Werlinich, a New York economist who watches state and federal employment numbers. "And the government wants those numbers as rosy as they can be." Arkansas' unemployment rate unexpectedly jumped seven-tenths of a percentage point to 5.7 percent in September, causing state labor officials to assert that the numbers needed to be adjusted due to the effects of the Gulf Coast hurricanes. Kim Friedman, spokesman for the state employment agency, said the October decline was based on revisions made in the state's September job market report by federal Labor Department officials. "Information continues to be gathered and processed regarding the effects of Hurricanes Katrina and Rita," Friedman said. "Most recent data show that some refinements were in order for Arkansas' revised September labor force numbers. The adjustment to 5.1 percent is now more in line with past trends." Now, instead of a jobless rate nearing 6 percent, the state job market appraisal is back to healthier pre-Sept. 11, 2001, levels, and 1 percentage point better than the U.S. unemployment rate. Overall, total employment rose to 1,300,900, while the number of workers without jobs decreased by 2,600 to 66,600. In October 2004, Arkansas' unemployment rate was 5.6 percent and 1,242,000 were employed. At that time, 74,100 Arkansans were out of work. Werlinich, president of New York-based Werlinich Asset Management, said the Labor Department numbers are not reliable as an economic indicator. He said state and federal labor data is often not accurate because it only provides a "sampling" of the workforce. Other factors must be accounted for, Werlinich said, such as the nation's trade deficit and indebtedness, rising interest rates, a possible housing bubble, record energy prices and consumer confidence. "These are more important as an overall economic snapshot than the unemployment report, he said, adding that one-time occurrences such as the Gulf Coast storms often dramatically affect the jobless rate. Likewise, Merrill Lynch senior economist Kathleen Bostjancic said recently that she believes the current U.S. jobless rate is actually around 6.2 percent. She said the Labor Department does not account for people who work part-time or who have stopped looking for work. "A lot of discouraged workers are still on the sidelines," Bostjancic said during an economic conference here last week. Last week, the Labor Department reported that the U.S. jobless rate dropped to 5 percent from 5.1 percent in September as payrolls grew by a slim 56,000 in October. Overall, Arkansas' non-farm payroll jobs expanded by 1,200 between September and October to 1,184,100. The largest increase occurred in government as staffing at state and local schools continued. State government employment rose by 2,500 in October to a record level of 209,600. Additions were attributed to the hiring of substitute teachers, student workers and other non-teaching personnel. Educational and health services gained 1,300 jobs, transportation and utilities sector rose 1,000 over the month to 245,800, and professional and business services added 100 jobs to total 111,000. On the down side, leisure and hospitality lost 1,900 jobs to total 91,900. Seasonal reductions were evident throughout the tourism and hotel industry, officials said Seasonal drop-offs also occurred in construction, where 700 workers were left off payrolls, while the beaten-down manufacturing sector slid by 400 to 201,900 workers in October. Other services had 40,900 workers in October, a seasonal decrease of 400, while jobs in the financial activities sector fell by 300. Natural resources-mining and information experienced no change in total jobs between months. Unemployment rates fell in all of the state's six metropolitan statistical areas in October, ranging from a low of 2.7 percent in the Fayetteville-Springdale-Rogers MSA to Pine Bluff's high of 6.2 percent. In between were the Hot Springs MSA at 4.3 percent, the Jonesboro MSA at 4.0 percent and the Little Rock-North Little Rock and Fort Smith MSA's at 3.9 percent. The October unemployment rate for minorities dropped from double digits to 9.2 percent. The jobless rate for whites was 4.0 percent, while the youth unemployment rate came in at 17.5 percent. |
