Arkansas had overall economic growth during the second quarter of 2025, with the state earning a B- for the quarter, according to the latest The Compass Report. Non-farm employment was 1.381 million in June 2025, up from 1.363 million in June 2024.
The unemployment rate rose from 3.4% to 3.7% over the same period, and gross sales and use tax collections declined slightly, from $372.3 million in June 2024 to $358.6 million in June 2025.
Building permit values rose from $267.6 million in June 2024 to $334.7 million in June 2025. In contrast, construction employment decreased from 67,100 to 65,200 jobs year-over-year.
“Overall, Arkansas experienced employment gains alongside a higher unemployment rate, lower consumer spending, and mixed outcomes in construction activity,” noted The Compass Report.
Employment increased in the manufacturing and hospitality sectors. Manufacturing grew from 162,000 in June 2024 to 164,300 in June 2025, while hospitality employment increased from 128,500 to 131,500.
The Compass Report is a partnership between the University of Arkansas at Fort Smith[1] (UAFS) and Talk Business & Politics. First National Bank of Fort Smith[2] is a sponsor of the statewide report.
Kendall Ross, UAFS associate vice chancellor of Economic and Workforce Development, and Kaitlyn Cavaness, an intern in the UAFS Center for Economic Development who helps compile, manage and review the data, are responsible for data collection and written analysis for the report.
A key factor in understanding the report is in understanding the “grading” approach used to measure the current and leading economic indicators. For example, a grade of “C” reflects no change in economic activity. The grades “B” or “A” indicate improvement above the historical average, and “D” and “F” indicate a decline in economic activity compared to the historical average.
In the second quarter of 2025 (April-June) report of Arkansas metro areas[3], Central Arkansas received an “B-” grade, the Fort Smith metro had a “C” grade, the Jonesboro area received a “C+” grade, and Northwest Arkansas had a “B-” grade.
Link here[4] for the second quarter 2025 raw data gathered by the University of Arkansas at Fort Smith Center for Economic Development.
Related
References
- ^ University of Arkansas at Fort Smith (uafs.edu)
- ^ First National Bank of Fort Smith (fnbfs.com)
- ^ Arkansas metro areas (talkbusiness.net)
- ^ Link here (talkbusiness.net)