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By Michael Pakko, May 18, 2012 10:43 AM

The unemployment rate in Arkansas declined another two-tenths of a percent in April, dropping to 7.2%.  When the U.S. unemployment rate was reported to have fallen in April, many commentators pointed out that the drop was associated with a decline in the labor force.  In Arkansas, however, the underlying statistics are more positive:  The number of unemployed persons declined by 2,800 and the number of employed rose by nearly 3,300, so the labor force increased by almost 500.  April marks the 9th consecutive month in which both the number of employed and the labor force increased, and the number of unemployed decreased.

Source: Bureau of Labor Statistics

The independent report on nonfarm payroll employment also conveyed good news for Arkansas.  Seasonally adjusted data show that employment increased by 5,500 in April, bringing total employment almost back to the peak level observed in April 2011.

Source: Bureau of Labor Statistics

Employment gains were evident in several sectors of the Arkansas economy.  Gains were particularly strong in Education & Health Services and Leisure & Hospitality Services.  Employment in Retail Trade also showed a large increase.  Goods producing sectors also expanded, with welcome employment gains in both Construction and Manufacturing.  Compared to the start of the recession in December 2007, total employment in Arkansas is down by 37,500 — largely due to contraction of the manufacturing sector.

Source: Bureau of Labor Statistics

April’s payroll employment increases do not appear to have been spread evenly around the state.   Data for metropolitan statistical areas (MSAs) show month-to-month gains in Fayetteville, Fort Smith, and Jonesboro.  Employment in Texarkana was unchanged, but the state’s other MSA’s showed declines.  Fort Smith has suffered the largest cumulative drop in employment since the start of the recession, so April’s increase of 2,200 jobs (+2.0%) represented a welcome departure from trend.  The addition of 1,400 jobs in Northwest Arkansas (+0.7%) brings total employment for the Fayetteville MSA up to a level slightly higher than at the beginning of the recession.  Jonesboro and Texarkana are the only other two MSAs in Arkansas that have this far acheived that distinction.

Source: Bureau of Labor Statistics

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By Michael Pakko, May 10, 2012 10:55 AM

Recently-released sales tax data from the Arkansas Department of Finance and Administration indicate that Arkansas Taxable Sales (ATS) increased by 1.7% in the first quarter of the year (seasonally adjusted). ATS growth had slowed to zero in the latter half of 2010 and the first half of 2011, but the most recent observation represents the third consecutive quarter of impressive growth.  On average, ATS has increased at a 7.9% annual rate over the past three quarters.

Gasoline prices were up in the first quarter, averaging $3.44 for a gallon of regular unleaded (up 22 cents from the fourth quarter of 2011).  Seasonally-adjusted gasoline sales also increased.  As a result, spending on gasoline increased by 9.1% and Arkansas Taxable Sales Including Gasoline (ATSIG) increased by 2.3%.  ATSIG growth in the first quarter was stronger than expected, coming in 1.8% ahead of the pace implicit in the most recent forecast posted on the Arkansas Economist.

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

The growth of ATSIG continues to compare favorably to statistics on national retail sales.  According to recently-revised data from the Census Bureau, U.S. Retail Sales increased by a total of 5.3% over the past three quarters.  Over the same period, ATSIG increased by 6.3%.

Sources: Census Bureau, Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

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Arkansas Taxable Sales (ATS) is calculated by the Institute for Economic Advancement to serve as a timely proxy for Arkansas retail sales. The series is derived from sales and use tax data, adjusting for the relative timing of tax collections and underlying sales, changes in tax laws, and seasonal patterns in the data.  Arkansas Taxable Sales Including Gasoline (ATSIG) incorporates data on the state motor fuel tax and gasoline prices from the Oil Price Information Service.

A spreadsheet of the data is available here: Arkansas Taxable Sales Data 2012:Q1 (Excel file)

* Data are preliminary until the release of the DFA report, Arkansas Fiscal Notes for April 2012, and will be updated when information becomes available.

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By Michael Pakko, May 4, 2012 7:30 AM

Yesterday’s report from the Arkansas Realtors® Association showed that March home sales were up 1.1% from a year earlier.  In the highly seasonal pattern of home sales, March is typically the beginning of a spring surge leading up to the peak summer sales months.  As shown in the chart below, that pattern is holding true this year with March sales only slightly ahead of last year’s pace.  Since the sharp downturn in sales leading up to the recession of 2008-09, last year was the first year in which the market was not supported by Federal home-buyers’ tax credits, making it the lowest sales-year in recent history.  (Sales were boosted primarily in the terminal months of the tax credit programs:  November 2009 and April 2010.)  Starting from the low base in 2011, sales are expected to show a fairly sizable improvement in 2012.

Source: Arkansas Realtors® Association

After applying statistical techniques to adjust for seasonal patterns, recent trends become more apparent.  Following a post-tax-credit “hangover” and subsequent rebound, sales have been slowly but steadily increasing during 2011 and 2012.  Monthly observations show that February and March are down slightly from the January sales pace.  However, the not-seasonally-adjusted patterns make it clear that January contributes little to the total annual sales pace. 

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Month-to-month changes are subject to considerable variability:  A few days difference in closing dates can result in home sales being recorded in one month or another.  Hence, it is often useful to look at quarterly totals to evaluate recent trends.  In the quarterly chart below, the steady increase in home sales even more evident.  Yesterday’s news release from the Arkansas Realtors® Association emphasized this quarterly perspective, reporting that first quarter sales were up 6% from the previous year — a summary that accurately summarizes the first-quarter sales pace.

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Although sales have been steadily improving, the first quarter total was slightly lower than the most recent forecast posted on these pages.  Nevertheless, total sales for 2012 will depend far more heavily on market activity during the peak summer months.  Stay tuned.

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By Michael Pakko, May 3, 2012 8:28 AM

Yesterday, the Bureau of Labor Statistics reported that unemployment rates in March were down from the previous year in 342 of the nation’s 372 metropolitan areas.  All of Arkansas’ metro areas were included in this total.  Year-over-year changes ranged from -0.1 percentage point in Little Rock to -1.1 percent in Memphis. 

Source: Bureau of Labor Statistics (Local Area Unemployment Estimates)

Smoothed seasonally adjusted estimates showed that the most recent changes in unemployment (from February to March) also indicated improved labor market conditions in the state’s metro areas.  The Hot Springs unemployment rate was unchanged at 7.6%, Little Rock was down 0.1 percentage points to 6.6%, and all the state’s other metro areas showed declines of  0.2 percentage points.

Source: Bureau of Labor Statistics (Smoothed Seasonally Adjusted Metropolitan Area Estimates)

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By Michael Pakko, April 25, 2012 12:31 PM

New estimates of local area personal income for 2010 were released today by the U.S. Bureau of Economic Analysis.  The data contain a wealth of information about aggregate income and its sources for every county in the United States.  But perhaps the best measure for comparing economic well-being in different areas is per capita income.  Previously released data showed that per capita income growth was 2.8% for the U.S. in 2010, and 2.3% for Arkansas.  The new data show that 41 of Arkansas’ 75 counties exceeded the national growth rate.   A total of 58 counties had growth rates that exceeded the rate of CPI inflation for 2010 (1.64%), implying real income growth.

County growth rates ranged from a low of -1.1% in Perry county to a high of 9.7% in Jackson county.  The distribution of growth rates by county is illustrated in the map below (and detailed in a table at the end of this article).  Northwest Arkansas has long been an area of rapid income growth, but a more remarkable observation about the 2010 data is the strong growth rates exhibited in the Delta region:  The counties of Arkansas, Asheley, Chicot, Drew, Jackson, Lee, Lincoln, Monroe, Phillips and Woodruff all had per capita income growth rates exceeding 4%.

Source: Bureau of Economic Analysis

A long-sought objective for economic development in Akansas has been to raise per capita personal income to a level equal to the national average.  Because the Arkansas growth rate was slightly lower than the U.S. average, the ratio of statewide per capita income to U.S. per capita income declined a bit in 2010, from 83% to 82%.  The two highest-income counties in the state, Pulaski and Union, remained above the national average but showed small relative declines.  The most rapidly growing county, Jackson County, showed an increase from 76% of average U.S. income in 2009 to 81% in 2010.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

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By Michael Pakko, April 24, 2012 4:44 PM

Last week’s employment report for Arkansas showed a surprising decline in statewide payroll employment.  After two months of growth totalling 6,700 jobs (+0.6%), nonfarm payrolls declined by 1,900 (-0.2%) in March (seasonally adjusted).  Data for the state’s metropolitan areas shows that only Fayetteville and Jonesboro showed positive growth for the month.  Employment was unchanged in Hot Springs and Pine Bluff.  Declines were registered in Memphis, Little Rock, Texarkana and Fort Smith.  Compared to the previous year, employment is up in most of Arkansas’ MSAs — the exceptions being Little Rock (-0.3%) and Fort Smith (-6.3%).  Compared to the start of the recession in December 2007, both Jonesboro and Texarkana are now in positive territory, with Fayetteville close to the break-even point.

Source: Bureau of Labor Statistics

As shown in the chart below, employment patterns among Arkansas metro areas have shown some dinstinct individual patterns.  All of the state’s MSAs showed sharp declines during the depth of the recession in late-2008 through 2009.  Signs of recovery were generally evident in early 2010, but employment growth rates have diverged considerably since then.  Many parts of the state showed weak or negative employment growth during 2011.  Jonesboro and Texarkana continued to experience positive growth — albeit at slower rates.  Hot Springs saw a surge in job growth during 2011, but the increase appears to have been temporary.  Other areas of the state continue to recover slowly.  The clear exception to the pattern of slow, uneven recovery is Fort Smith:  After suffering an 8% decline in employment in 2008 and 2009, recovery in early 2010 was only partial and temporary.  More recent job losses in the Fort Smith MSA have continued to mount.

Source: Bureau of Labor Statistics

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By Michael Pakko, April 20, 2012 1:36 PM

The unemployment rate in Arkansas fell to 7.4% in March – down 2-tenths of a percent from the previous month.   The new data from the U.S. Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) showed that the favorable trends that emerged in the household survey late last year are continuing:  The number of unemployed Arkansans fell by 1,900 in March and the number of employed was up by 5,500.  Hence, the unemployment rate declined while the labor force expanded.  March represents the eighth consecutive month in which we’ve seen these trends.  Since July 2011, the number of unemployed is down by approximately 8,000 and the number of employed is up by more than 32,000.

Source: Bureau of Labor Statistics (Local Area Unemployment Statistics)

Payroll Employment
The separate payroll survey was not as unambiguously positive.  Seasonally adjusted, total nonfarm payroll employment fell slightly in March – down by 1,900 jobs.  The seasonally adjusted data might be distorted this year by the warm winter and early spring.  Construction employment, for example, was up sharply in January and February, but declined by 2,100 in March.  This pattern might simply reflect an unusually early start to the construction season.

In addition to construction, sectoral declines in the payroll employment data were prominent for Professional & Business Services (-1,700) and Government (-900).  On the other hand, employment in the Leisure & Hospitality sector was up by 2,000 in March, and Education & Health Services saw a gain of 1,000.  Those two super-sectors, along with Mining & Logging and Government, are registering more jobs now than at the start of the recession in December 2007.

Source: Bureau of Labor Statistics (Current Employment Statistics)

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By Michael Pakko, April 10, 2012 4:02 PM

The smoothed seasonally-adjusted unemployment rates for metro areas have been updated.  The data for February show monthly declines in Fayetteville, Memphis, Pine Bluff, and Texarkana.  The rate was unchanged for Fort Smith and Little Rock, and moved higher in Hot Springs and Jonesboro.

Source: Bureau of Labor Statistics

Although changes in unemployment rates were mixed for the month, rates are down sharply from their peak levels of September/October 2011.  The declines have been particularly steep in Fayetteville, Memphis, Pine Bluff and Texarkana.

Source: Bureau of Labor Statistics

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By Michael Pakko, April 10, 2012 11:14 AM

The Bureau of Labor Statistics (BLS) reported this morning that payroll employment in February had increased from the previous year in most of the nation’s metro areas:  “267 metropolitan areas reported over-the-year increases in nonfarm payroll employment, 98 reported decreases, and 7 had no change.”  Here in Arkansas, metro employment was up in only four metro areas (Fayetteville, Little Rock, Memphis, and Texarkana) and it was lower in the other four (Fort Smith, Hot Springs, Jonesboro, and Pine Bluff).

Seasonally adjusted data show that from January to February, employment declined in most of Arkansas’ metro areas.  Hot Springs, in particular, showed a substantial monthly decline.  In contrast, employment was up sharply in Texarkana and also rose in Fayetteville and Memphis.  Since the national and statewide employment trough of February 2010, employment growth rates around the state have diverged remarkably.  Texarkana, Fayetteville, and Memphis have all out-performed the statewide average.  In Hot Springs, rapid employment growth during 2011 has reversed, and is now lower than its level in February 2010.  In Pine Bluff and Fort Smith, employment has continued to decline.  In fact, employment in Fort Smith is now 12.8% lower than at the start of the recession in December 2007.

Source: Bureau of Labor Statistics

The BLS report also noted that unemployment rates in February were down from the previous year in 344 of the nation’s 372 metro areas.  Four of the eight metro areas in Arkansas were included on this list.

Source: Bureau of Labor Statistics

The smoothed seasonally-adjusted unemployment rates for Arkansas MSAs will be available later today.

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By Michael Pakko, April 3, 2012 11:24 AM

Today’s Arkansas Democrat-Gazette reports on mass layoff events in Arkansas during 2011.  The data from the Bureau of Labor Statistics showed that there were 154 mass layoff actions in Arkansas during 2011, resulting the separation of 16,665 workers (as measured by new filings for unemployment insurance benefits).  This was a record high for Arkansas, yet the data show a net increase in employment overall.  Although mass layoff events generate news headlines, they constitute a relatively small component of dynamic labor market flows.

To put the Arkansas total in context, the following table compares total separations associated with mass layoffs with the size of each state’s labor force.  This calculation allows us to compare the relative importance of mass layoffs among the states, accounting for differences in their sizes.  The comparison shows that total mass-layoff separations in Arkansas amounted to 1.22% of the state’s labor force.  The shares ranged from 0.12% in South Dakota to 2.40% in Wisconsin.  Arkansas ranked number 17 among the 50 states plus D.C.

Source: Bureau of Labor Statistics

More generally, mass layoff events are only one component of gross job flows.  To get a sense of their overall importance, consider the following comparisons for the U.S. in 2011:  Separations associated with mass layoffs nationwide amounted to 1,808,451.  According to the BLS’s Job Openings and Labor Turnover Survey (JOLTS), total layoffs and discharges were 20.7 million.  Hence, mass layoffs accounted for only 8.8% of total layoffs and discharges.  In turn, layoffs and discharges accounted for less than half of the total 48.2 million job separations in 2011.  Meanwhile, new hires totalled 50.1 million.  The gross separations and hiring numbers were more than 25 times as large as the net change in employment — and the net increase in employment (as measured by the JOLTS data) was larger than the total number of mass-layoff separations.  When we hear about monthly or yearly changes in employment, the reported net figures represent only a tiny fraction of total labor market activity.  Similarly, mass layoffs represent a very small share of total employment flows.