Arkansas House Prices – 2014:Q3

By , November 25, 2014 3:23 PM

The latest update on house prices from the Federal Housing Finance Agency came out this morning.  The most comprehensive of the FHFA indexes, the “Expanded-Data Indexes” show Arkansas house prices up 1.3% in the third quarter, compared to a 1.5% increase nationwide (seasonally adjusted).  Over the past four quarters, Arkansas house prices were up 3.4%, while U.S. prices rose by 6.0%.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

Readings on house prices in Arkansas metro areas were mixed.   From the second quarter to the third quarter, prices in Fayetteville, Hot Springs and Pine Bluff all increased sharply.  However, prices were down in the state’s other metro areas.  Over the past year, Fayetteville, Hot Springs and Memphis have shown the largest cumulative gains.

Source:  Federal Housing Finance Agency; seasonally adjusted by the Institute for Economic Advancement

Source: Federal Housing Finance Agency; seasonally adjusted by the Institute for Economic Advancement.

The figure below displays a slightly longer-run view.  Relative to the nationwide house-price peak at the beginning of 2007, prices are higher or unchanged in most of the state’s metro areas.  The chart shows that the three metro areas that have shown the most rapid appreciation over the past year or two are the same areas that exhibited the largest declines during and after the recession.  For example, prices in Northwest Arkansas declined by nearly 20% from the beginning of 2007 until mid-2011, but have since recovered to the point of being only 9%  below the 2007 peak.

Source:  Federal Housing Finance Agency; seasonally adjusted by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency; seasonally adjusted by the Institute for Economic Advancement.

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Earnings, Prices, and the New Arkansas Minimum Wage

By , November 24, 2014 7:35 AM

A commentary in this week’s issue of Arkansas Business presents statistics on the Arkansas’ new minimum wage with comparisons to other states — adjusting for differences in cost-of-living and average earnings:  “Evaluating New Minimum Wage’s Effects.”  A spreadsheet of the raw data and calculations, along with a more complete interstate comparison of price- and wage-adjusted minimum wage rates, can be downloaded here: Minimum Wages by State.

PriceWage Table

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Arkansas Employment and Unemployment – October 2014

By , November 21, 2014 10:28 AM

The latest report on employment and unemployment in Arkansas shows the unemployment rate dropping two-tenths of a percent to 6.0% in October, the lowest level since July 2008.  More importantly, the underlying components of the unemployment rate are moving in a positive direction.  Earlier in the year, a falling unemployment rate was accompanied by a sharply contracting labor force.  The data for October shows a decline in the number of unemployed (-1,994), an increase in employment (+9,430), and an expanding labor force (+7,436).  The increase in labor force participation continues an uptrend that emerged in the September data.

Source:  Bureau of Labor Statistics, Local Area Unemployment Statistics

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics

Payroll Survey
Data collected from the state’s employers shows a small monthly increase in employment in October.  Nonfarm payroll employment expanded by 800 in October, and is up 14,200 from the previous year (seasonally adjusted).  Notable monthly increases were reported for Manufacturing, Transportation & Utilities, and Education & Health Services.  Employment in Wholesale and Retail trade contracted from September to October.

Source:  Bureau of Labor Statistics, Current Employment Statistics (CES)

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Since the employment trough of 2010, the official data show an increase in payroll employment of 44,700, still 12,300 lower than before the 2008-09 recession.  As we reported last month, however, the payroll data for late 2013 are likely to be revised down by approximately 9,400 jobs when the annual benchmark revisions are released in early 2015.  Taking into account these expected revisions, Arkansas payroll employment has increased by approximately 35,300 since February 2010, and remains 21,700 below the level recorded in December 2007.

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*Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, can be found hereTable-Seasonally Adjusted NFPE.

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Local Area Personal Income – 2013

By , November 20, 2014 4:47 PM

The Bureau of Economic Analysis released new statistics on local area personal income this morning.  The new data for metro areas and counties show a pronounced slowdown in economic growth in 2013 compared to 2012, but the slowdown was not unique to Arkansas.  Nationwide, per capita personal income growth slowed from 4.4% in 2012 to 1.3% in 2013.   As shown in the table below, Fayetteville was the only metro area in Arkansas that grew faster than the national average in 2013.   Growth in three of Arkansas metro areas was negative in 2013, and with the exception of Northwest Arkansas none of the state’s metro areas experienced growth above 1%.  Revised figures for 2012 show that the slowdown in 2013 was particularly sharp in Arkansas, with all metro areas falling from above average growth in 2012.  Taking a somewhat longer view, two-year average growth rates for all of Arkansas’ metro areas except Texarkana exceeded the nationwide average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The same pattern of sharp deceleration was evident in the county-level data as well.  Each of Arkansas’ 75 counties experienced a slowdown in growth between 2012 and 2013.  Individual county growth rates ranged from a high of 6.9% in Scott County to a low of -4.6% in Hempstead County.  Above-average growth was more common among individual counties than among metro areas:  34 of the state’s counties had growth rates that exceeded the national average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Levels of per capita income continue to vary widely across the state.   In 2013, three of Arkansas’ counties had per capita personal income above the national average:  Pulaski, Union, and Arkansas counties.  At the other extreme, Sevier county had per capita income that was only 55.7% of the U.S. average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

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Metro Area Employment and Unemployment – September 2014

By , October 29, 2014 3:49 PM

In September, unemployment rates edged down in five of Arkansas’ metro areas and were unchanged in the other three.  Smoothed seasonally adjusted estimates of unemployment were down 0.1 percentage point in Fayetteville, Fort Smith, Little Rock, Pine Bluff, and Texarkana.  Rates were unchanged in Hot Springs, Jonesboro, and Memphis.  Since September of 2013, unemployment rates have fallen more than a full percentage in all of the state’s metro areas.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

While unemployment rates continue to trend downward, payroll employment growth rates are diverging among Arkansas metro areas.  In September, employment was down in Hot Springs and Memphis, was unchanged in Pine Bluff, and was up in the remaining MSAs.  The largest increases were in Jonesboro (+1.7%) and Fayetteville (+1.0%).  Over the past 12 months, employment has increased in every metro area except Pine Bluff.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

As show in the last column of the table above and in the chart below, the longer-run trends of payroll employment differ considerably among metro areas.  Fayetteville and Jonesboro continue to see employment growth well above the previous cyclical peak.  As of September, Little Rock joined the list of metro areas where employment exceeded pre-recession levels.  In the remaining metro areas, employment growth since December 2007 remains negative.  In Fort Smith, Pine Bluff and Texarkana, employment has fallen, on net, since the labor market recovery began in February 2010.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

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Arkansas Employment and Unemployment – September 2014

By , October 21, 2014 2:22 PM

Latest data from the Arkansas Department of Workforce Services and the U.S. Bureau of Labor Statistics showed the Arkansas unemployment rate ticking down to 6.2% in September, down from 6.3% in August (seasonally adjusted).  The number of unemployed in the household survey declined by about 850, while the number employed increased by more than 4,500.  As a result, the size of the labor force was up by 3,700.  Both employment and labor force participation had been sliding downward since March of this year.  September’s upticks suggest that the downward trends have subsided.

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

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

Payroll Employment
Nonfarm payroll employment increased by 2,900 in September, following a revised increase of 800 in August (seasaonally adjusted).  The not-seasonally adjusted data released by the Arkansas Department of Workforce Services showed a monthly increase of over 15,200.  However, that increase was entirely attributable to the start of the school year.  State and local government employment was up 13,100 (reflecting employment public schools, colleges and universities), while employment in Educational services was up 2,100 (reflecting employment at private schools).  The seasonally adjusted data (shown in the table below) revealed a strong gain in Professional & Business Services (+2,300).  Construction emp0loyment was up slightly (+800) while manufacturing employment declined a bit (-700).

Source:  Bureau of Labor Statistics, Current Employment Statistics (CES)

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Overall, the current statistics show an employment increase of 43,400 since the trough of February 2010, leaving the state down by only 13,600 jobs relative to pre-recession levels.  However, the data for the past 18 months is subject to annual benchmark revisions that will ultimately be published in March 2015.  As is the tradition here at the Arkansas Economist, we’ve taken a look at the underlying detailed data in order to anticipate the nature of the visions — an exercise we’ve called “forecasting a revision of history.”

At the Little Rock Regional Economic Briefing last week, we presented the most recent version of the forecasted revision of history.  Using data from the Quarterly Census of Employment and Wages (QCEW) through March 2014, the next round of revisions to nonfarm payroll employment are expected to show a downward adjustment of approximately 9,400 jobs.  As shown in the figure below, the revisions will primarily effect the spurt of job growth that show up in the current data for the second half of 2014.  After applying the expected revisions to the newly-released statistics, the totals in the table above would be modified to show a net gain of only 34,000 jobs since February 2010, leaving total employment 23,000 below pre-recession levels.

Sources:  Bureau of Labor Statistics (CES, QCEW), and author's calculations.

Sources: Bureau of Labor Statistics (CES, QCEW), and author’s calculations.

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*Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, can be found hereTable-Seasonally Adjusted NFPE.

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2014 Arkansas Economic Forecast Conference

By , October 6, 2014 8:49 AM

The  Arkansas Economic Forecast Conference is being replaced this year with a program jointly sponsored by the Institute for Economic Advancement and the Little Rock Branch of the Federal Reserve Bank of St. Louis:

Untitled6

UPDATE – October 15, 2014
Here are the presentations from this morning’s Regional Economic Briefing:

Federal Reserve economists Kevin Kliesen and Charles Gascon – Kliesen-Gascon_October 15.pdf

IEA State Economic Forecaster Michael Pakko – Pakko-Slides-2014.pdf

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Arkansas Personal Income – 2014:Q2 and Revisions

By , October 6, 2014 8:47 AM

New data on personal income that came out last week included first-published data for the second quarter of 2014, along with revisions going back as far as 2001.  The news on personal income for Arkansans was generally quite positive, but also highlighted some areas of weakness in the state’s economic expansion since the 2008-09 recession.

The news for the most recent quarter was certainly upbeat:  Personal income in Arkansas rose 1.9%–above the national average of 1.5% and ranking Arkansas as the 7th fastest growing state for the quarter.  A revision to the data for the first quarter of the year was also good news:  Previously reported as a decline of 0.2%, the revised data for 2014:Q1 showed an increase of 0.8%.  The update to the first quarter data was largely due to a substantial upward revision to estimates of farm income (which accounted for much of the weakness in the first-published report).  As shown in the chart below, Arkansas personal income is 18.5% higher than at the previous cyclical peak of 2008:Q2.  Over the same period, U.S. personal income is up 17.4%.  On the basis of overall personal income, Arkansas’ cumulative recovery is faring slightly better than the nation’s.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The past revisions to the data for Arkansas were also positive.  As shown in the chart below, the data for 2012 and 2013 were revised upward substantially — averaging 2.3% over that two year period.  The spike in income during the fourth quarter of 2012 was subject to a particularly large revision.  Recall that this spike was attributable to income-shifting associated with changes in income tax laws that went into effect at the beginning of 2013 (see, Arkansas Personal Income – How Policy Has Affected Growth).  It is therefore not surprising that the revision for 2012:Q4, in particular, was primarily attributable to an upward revision of the Dividends, Interest, and Rent component of overall personal income.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

In fact, the entire revision was attributable almost exclusively to the Dividends, Interest, and Rent component.  Of the total average upward revision for 2012 and 2013, Wages and Salaries accounted for approximately 1% and Proprietors’ Income accounted for about 19%.  Transfer Receipts and Employer Contributions for Pensions and Insurance were revised downward.  After those downward revisions in other components, the Dividends, Interest, and Rent component was left to account for 114% of the total revision.

The revision to Dividends, Interest, and Rent reflects a realization that recent earnings on returns to wealth were larger than previously recognized.  But the small revision to Wages and Salaries suggests no improvement in the record on labor compensation during the business cycle expansion in Arkansas.  And even before the data revisions, the pattern was skewed — the new data highlight the imbalance.

The two charts below (using the newly revised data), show how the two components have fared in Arkansas relative to the national average.  The first shows Wages & Salaries, which comprise about 55% of total income in Arkansas.  While the data show that the recession did not impact Wages and Salaries in Arkansas as much as the rest of the nation, the pace of recovery has been slower.  Compared to the peak quarter of total personal income, Arkansas has seen a cumulative increase of 13.0%, while the U.S. increase has been 13.8%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The second chart shows Dividends, Interest, and Rent, which accounts for about 21% of total personal income in Arkansas.  After a downturn of the same magnitude as the U.S. average, this component has shown remarkable growth in Arkansas.  Relative to 2008:Q2, this component has shown a cumulative increase of  27.5% in Arkansas, while increasing a total of 13.3% nationwide.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The relative strength of growth in Dividends, Interest, and Rent — in spite of its relatively small share in total income — fully accounts for the fact that Arkansas personal income growth has exceeded the national average during the economic expansion.  The relatively sluggish performance of the Wages and Salaries component highlights the weakness that appears to be holding back the recovery of the state’s labor markets.

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Arkansas Home Sales – August 2014

By , October 2, 2014 12:09 PM

The Arkansas Realtors® Association announced this morning that home sales in August were down 3.4% from a year earlier.  This was the first year-over-year decline since last November, but that shouldn’t come as a surprise.  The summer months of June, July, and August are typically the peak months of the year, but the peak can come in either July or August, depending on the number of closings that take place before or after Aug 1.  In 2013, the peak month was August, whereas this year the highest-sales month turned out to be July.  Comparing this year’s July/August total with last year’s, we see an increase of 3.4%.  Year-to-date, home sales are up 5.1% over last year.

ARA_0814_NSA

After seasonal adjustment, it is clear that while the August sales figure represents a slight down-tick from the previous month, it provides little evidence of any change in the upward trend of home sales over the past two years.

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

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

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Metro Area Unemployment & Employment – August 2014

By , October 1, 2014 5:06 PM

This morning, the Bureau of Labor Statistics (BLS) released new information on unemployment and employment in metropolitan areas.  The BLS News Release reported that unemployment rates were down from a year earlier in 322 of the nations 372 metropolitan areas.  All eight of Arkansas’ metro areas were included in that total, with the year-over-year declines ranging from 0.9% in Fayetteville to 1.8% in Pine Bluff.

The not-seasonally adjusted data show that the unemployment fell rather sharply from July to August, but that is a typical seasonal effect.  (For example, over the past 10 years, the not-seasonally adjusted unemployment rate for Arkansas has, on average fallen by 0.57% between July and August, while the seasonally adjusted average was +0.03% for the same monthly change.)  Data from the Smoothed Seasonally Adjusted Metropolitan Area Estimates show that there was little change in metro-area unemployment rates after taking account of the usual seasonal swing:  Unemployment rates declined by one-tenth of a percentage point in Fort Smith and Pine Bluff, increased by one-tenth in Memphis, and were unchanged in the remaining metro areas.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Over the past several months, we have noted a sharp decline in labor force participation in Arkansas.  In the report on statewide unemployment in August, we saw a slowdown of that trend.  As shown in the figure below, most of the state’s metro areas have shown a similar downward trend in the size of their labor forces since March 2014.  The weakening of the downward trend is also evident in most of the state’s metro areas (with the notable exception of Memphis).

There is no clear explanation of why we have seen such a sharp downward trend since spring.   One pattern that appears to generally hold in the figure below is the relationship between cumulative labor force contractions and the more recent weakening of the downward trend.  In particular, the metro areas that have experienced the largest cumulative reductions in labor force participation during 2013 and 2014 continue to trend downward.   The weakening of the downward trend is more apparent in metro areas that have only recently been subject to a declining labor force.  In fact, the labor force in Jonesboro — where cumulative increases over the past two years have been the largest — edged slightly higher in August.

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

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

Payroll Employment
Statewide payroll employment growth was essentially zero in August, with metropolitan areas showing a wide range of changes.  From July to August, employment was down in four metro areas (Little Rock, Memphis, Pine Bluff and Jonesboro) and was up in the remaining four (Fayetteville, Texarkana, Fort Smith and Hot Springs).   Over the past year, only Pine Bluff has seen a net reduction in payroll employment (-1.4%), with increases in other metro areas ranging from +0.5% in Fort Smith to +1.9% in Jonesboro.  Compared to pre-recession employment levels, only Jonesboro and Fayetteville have seen net increases.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

 

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