Government jobs, less exposure to housing bubble were key to Little Rock's resilience during the Great Recession


ST. LOUIS—Over the past century, Little Rock has transitioned from an economy that produced lumber and cottonseed to one that predominantly provides services—the lion’s share of which is in health, education and state government.

According to analysis published by the Federal Reserve Bank of St. Louis, Little Rock’s resilience during the recession can be attributed to the confluence of three factors:

  • the metro areas was less exposed to the housing crisis;
  • a substantial portion of employees work for state and local governments and;
  • the health and education services sector continued to grow along a prerecession trend.

These findings are the subject of a recent article in The Regional Economist


Prior to the recession, the unemployment rate in Little Rock tracked the national average; since then, the metro area’s economy has proved to be more resilient than the nation’s.  From peak to trough, the U.S. shed 6.3 percent of its payroll employment, whereas Little Rock lost 4.7 percent.

However, after the recession officially ended (in 2009), certain sectors have seen employment drop off.  Between 2010 and 2012, Little Rock added approximately 3,500 jobs per year—far less than the approximately 6,000 jobs its economy was adding per year prior to the recession.  These total figures do not fully capture sector-level dynamics.

Current Conditions

Little Rock’s ability to weather the recession better than the nation and the state was dependent upon consistent employment growth at all levels of government, mostly state government.  However this is the only sector that has fared worse since the rebound in employment began in early 2010.

Since January 2012, employment in state and local governments has steadily declined by an average of 0.65 percent year over year, possibly reflecting the end of federal stimulus as well as the lagged effect of lower state tax revenue in recent years. 

Of the 55 largest hospitals and medical centers in Arkansas, 14 are located in the Little Rock MSA (Metropolitan Statistical Area).  About one-third of all jobs in the health and education services sector across the state are in Little Rock.  With implementation of the Affordable Care Act this sector may benefit from an uptick in demand for services and the ability to pay from the newly insured population.


The signals on the economy in Little Rock continue to be mixed.  Government payroll employment not only continued to decline in 2013, but shed jobs at a quickening pace.  On the other hand, broad improvements in in the real estate sector have led to the creation of construction jobs at a rate not seen since before the recession.  Overall, it is still unclear whether the uptick in growth in the MSA is yet another intimation of the region’s economic resiliency observed during the recession or simply transitory divergence along a slower expansionary trend.



With branches in Little Rock, Louisville and Memphis, the Federal Reserve Bank of St. Louis serves the Eighth Federal Reserve District, which includes all of Arkansas, eastern Missouri, southern Indiana, southern Illinois, western Kentucky, western Tennessee and northern Mississippi. The St. Louis Fed is one of 12 regional Reserve banks that, along with the Board of Governors in Washington, D.C., comprise the Federal Reserve System. As the nation's central bank, the Federal Reserve System formulates U.S. monetary policy, regulates state-chartered member banks and bank holding companies, provides payment services to financial institutions and the U.S. government, and promotes community development and financial education.

Contact Us

Adriene Dempsey


Suzanne Jenkins


Laura Girresch


Maria Hasenstab


Laura Taylor