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On the rebound: Arkansas' unemployment figures show state moving ahead while parts of the country remain stagnant.

Arkansas continues to shake off the shackles of recession more easily than most other states.

That is evident in recent unemployment figures from the state Employment Security Division. An unseasonably mild winter allowed construction and agricultural workers to ply their trades in months that normally aren't active ones for the two industries.

The state's unemployment rate dropped to 7 percent in March, down from 7.7 percent the month before.

The March employment total was 1.07 million, according to the ESD, up an estimated 20,900 workers from the month before.

Meanwhile, the national March unemployment average remained at 7.3 percent for a second consecutive month with 9.2 million Americans out of work.

Joe LaFace, research administrator for the state Department of Finance and Administration, says the state's non-agricultural wage and salary employment numbers are a sign that Arkansas is slowly emerging from the recession that began in July 1990.

"We've had two months in which we've had growth," LaFace says.

He's referring to January and February, months in which the non-agricultural wage and salary average grew 1.6 and 1.71 percent, respectively.

"That was the first turnaround in 18 months," LaFace says.

Non-agricultural wage and salary employment in Arkansas totaled 935,000 jobs in January and increased to 943,000 jobs in February.

The number of jobs has increased by 26,500 since February 1991. About 80 percent of those jobs are in the service sector -- transportation and public utilities, wholesale and retail trade, finance, insurance, real estate, services and government.

New Jobs

January employment figures took into account three new or expanded plants that produced 110 jobs. The two expansions were in El Dorado, where ConAgra Poultry Co. added 60 jobs and Great Lakes Chemical Corp. added 10 jobs. At Augusta, Illinois Tool Works Paslode moved into a former Morrilton Plastics Products Inc. facility and added 40 jobs.

Employment figures are seasonably adjusted, thus painting a more accurate picture of the state's employment situation, LaFace says. The seasonal adjustment takes into consideration the summer months when college and high school students enter the work force and the winter months when construction and agricultural employees generally are removed from it.

"You have to understand that certain things are seasonally impacted," says economist Charles Venus of Little Rock's Venus & Associates. "From November through January, there are big drops in employment due to construction and crops."

February's gross state revenues were $155.6 million, an increase of $23.1 million (17.4 percent) when compared with February 1991, according to DF&A's Office of Economic and Tax Research.

In the eight-month period that ended in February, gross general revenues were $1.46 billion, up $128.6 million (9.6 percent) from the same period a year earlier.

A positive economic sign nationally is the rise in the National Association of Purchasing Management's index of business activity. The index, based on a survey of more than 250 purchasing officials in various industries, determines trends in employment, production, inventory and new orders. The index rose in February after having been in decline since October 1991.

The U.S. Consumer Price Index for urban consumers increased in February by 0.4 percent.

The difficulty in gauging the state and U.S. economies is illustrated by the ESD's recently revised 1991 employment figures. The revised figures indicate a growth rate of 1.43 percent for the state and 1.46 percent for the Little Rock/North Little Rock metropolitan statistical area. Earlier figures showed the state growing at 3 percent and the Little Rock/North Little Rock area growing at 1.6 percent.

According to officials at the University of Arkansas at Little Rock's Arkansas Institute for Economic Advancement, the revised figures show that the Little Rock/North Little Rock area is representative of the state as a whole even though the area has only 27 percent of the jobs.

"The 10-year average growth difference between the state and the MSA is about 0.45 percent," says John Shelnutt, a senior research specialist at the AIEA.

The latest unemployment figures leave Shelnutt, DF&A's LaFace and others hopeful about the remainder of 1992.

"I think Arkansas will outperform the nation," LaFace says. "Our manufacturing sector is leaner on average, and our labor force is much more competitive. We're going to be in a position to grow at a slightly higher average than the nation as a whole."
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Author:Taylor, Tim
Publication:Arkansas Business
Date:Apr 13, 1992
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