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CAPITAL FLIGHT (THIS WEEK'S EMPLOYMENT DATA)
Today's non-farm employment data offers further evidence of capital flight from Arkansas. Employment in the capital-intensive manufacturing sector continued its decline in February, to 231,100 jobs from 232,100 in January. (U.S. Bureau of Labor Statistics) The data's release follows Wednesday's weak Federal Reserve Beige Book report on conditions in the 8th District, including Arkansas.
Commenting on the continued loss of manufacturing jobs, Arkansas Employment Security Department Director Ed Rolle said, “Although we continue to lose manufacturing jobs in the state, the loss of 900 jobs in February and 1,100 in January was significantly below the average of 1,500 jobs lost each month in 2001." Manufacturing is Arkansas' third largest non-farm sector, trailing only Services and Trade (Wholesale & Retail).
Manufacturing jobs continue to disappear in response to Arkansas' high tax rates on capital. Employment in the sector is now at levels last seen in 1991. Since July 2000, Arkansas manufacturing employment has declined nearly eight percent. It has fallen 18 of 20 months since July 2000 when 252,000 worked for manufacturers. The only gains were in October 2000 and 2001 when a modest 100 jobs were created each month.
This Week's National Employment Data<>
This week's national employment data offers further proof of the positive trend noted in APF's 2002 economic forecast. First-time jobless claims for unemployment benefits fell again yesterday to 376,000 for the week ended March 1 from a revised 381,000 the prior week (U.S. Department of Labor).
The more important four-week moving average, which peaked at 505,000 last October, fell again to 372,750. Due to seasonal factors the moving average provides a more accurate view of the underlying trend in employment. Today's release of private non-farm employment showed the first improvement since May 2001:
Private Non-Farm Payroll Employment
(Seasonally Adjusted) (In Thousands)
(Note: The January and February 2002 numbers are preliminary and subject to revision).
Source: U.S. Bureau of Labor Statistics