Metro Area Employment and Unemployment – October 2013

By , December 10, 2013 3:38 PM

Still catching up with the backlog from the government shutdown, the Bureau of Labor Statistics last week released data for metro area employment and unemployment for both September and October.  Not surprisingly, unemployment rates rose in October as federal workers and contractors on furlough were classified as unemployed.  The smoothed seasonally-adjusted metro area estimates show that unemployment in October increased by 0.3% in Hot Springs and Pine Bluff, and by 0.2% in Little Rock.  Fort Smith was the only metro area in the state that did not see an unemployment rate increase in October.  In fact, Fort Smith’s rate was down by one-tenth from August.

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

Over the past year, unemployment rates in Arkansas have been on the rise.  Statewide, the rate has risen from 7.2% in October 2012 to 7.5% in October 2013.  Among the state’s metro areas, only Fort Smith has seen a net decline in unemployment over the same period, while Jonesboro was unchanged.  Unemployment rates have risen in all of the other seven metro areas, with notable increases in Pine Bluff, Texarkana, Memphis and Hot Springs.

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

Payroll Employment
Payroll employment figures (which should not have been affected by the government shutdown) showed some sizable gains in October.  Employment in October rose by more than 1% in both Pine Bluff and Fort Smith.  The increase in Fort Smith came on top of an increase in September as well.  The only metro areas that saw a decline in payrolls for October were Hot Springs and Memphis.  Compared to a year ago, employment was higher in all metro areas except Pine Bluff and Hot Springs.

Source: Bureau of Labor Statistics, Current Employment Statistics

 

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Arkansas House Prices: 2013:Q3

By , December 3, 2013 3:14 PM

The latest data from the Federal Housing Finance Agency (FHFA) shows a continuing upward trend in Arkansas house prices, albeit at a slower rate than the U.S. average.  The FHFA’s “Expanded Data Indexes” showed that Arkansas house prices rose 0.5% in the third quarter compared to an increase of 2.2% nationwide (seasonally adjusted).  Over the past year, house prices were up 2.6% in Arkansas and up 8.8% for the entire U.S.

Source: Federal Housing Finance Agency; seasonal adjustment by the Institute for Economic Advancement

According to the “All-Transactions Index,” which includes home purchases and refinancings through FannyMae or FreddieMac, Arkansas house prices were down slightly for the quarter (-0.3%), but still up 2.2% over the past year.  Among the state’s metropolitan areas, prices were down everywhere except Jonesboro and Little Rock.  But even after a 1.1% decline in third quarter, prices in the Fayetteville-Springdale-Rogers metro area were 3.2% higher than a year earlier.

Source: Federal Housing Finance Agency

As illustrated in the figure below, the longer-term trends in house prices differ considerably among metropolitan areas.  The two-year growth rate of 3.6% in Northwest Arkansas represents a sharp reversal of the declining trend in 2007-2011.  On the other hand, the two-year growth rates of 5.6% in Jonesboro and 2.4% in Texarkana represent continued rising prices.  In fact, the nationwide collapse of housing prices preceding and coinciding with the recession was evident only in Fayetteville and Memphis (with a delayed downturn in Hot Springs). Compared to the first quarter of 2007, house prices are higher in Texarkana, Jonesboro, Fort Smith, Little Rock, and Pine Bluff.

Source: Federal Housing Finance Agency

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The Expanded Data Indexes include home purchases financed through FannieMae and FreddieMac, plus additional data from county recorders’ offices and from DataQuick.  The All-Transactions Indexes include both home purchases and refinancings through Fanny and Freddie, but without the additional data that are included in the Expanded Data Indexes.

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Arkansas Employment and Unemployment in September & October

By , November 22, 2013 10:47 AM

This morning’s reports from the U.S. Bureau of Labor Statistics and the Arkansas Department of Workforce Services were mixed, with contradictory signals from the household and payroll reports continuing to confound clear interpretation of the data.  Due to the federal government shutdown in October, release of the September data was postp0ned to coincide with the October release, so we have two months of statistics to consider.

Household report:
The headline statistic was an uptick in the Arkansas unemployment rate in October– to 7.5%.  September’s unemployment rate was unchanged from the previous month at 7.4%.  The October increase coincided with a rise in the national unemployment rate from 7.2% to 7.3%, and can be at least partly attributed to the government shutdown.  Although the BLS has described some ambiguity in the survey results for October, most government workers who were furloughed over the first part of the month appear to have been correctly classified as being temporarily unemployed.

Recent trends in Arkansas employment, unemployment and labor force participation continued over during September and October.  The number of employed declined by more than 2,800 over the two-month period, while the number of unemployed increased by over 1,200.  Accordingly, the Arkansas labor force contracted by approximately 1,600 workers.  As shown in the set of charts below, these trends are alarming.  The household survey data are showing that the number of employed has dropped by over 44,000 since January of 2012, along with a labor force decline of 46,000 over the same period.  The number of unemployed – which had been in decline in 2012 and early 2013 — has increased by 4,500 since April.

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

Payroll Report:
In contrast to the household data, the survey of employers showed positive employment growth in both September (+900) and October (+5000).  Compared to October 2012, the latest payroll employment figure shows a net increase of 10,000 jobs.  This is in sharp contrast to the nearly 30,000 employment decline over the same period in the household survey.

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

Payroll employment gains were distributed across several service-providing sectors, along with a two-month net increase in manufacturing employment.  Growth in transportation and utilities was particularly robust, accounting for 2,600 jobs.  Employment in retail trade also experienced a strong gain (+1,600).  Overall, payroll employment in October was up more than 40,000 since the employment trough of February 2010, but still approximately 17,000 below pre-recession levels.

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

The contrast between the trends in the payroll and household surveys is something of a puzzle.  Both are based on survey data, and are subject to both sampling and non-sampling error.  But additional information from the Quarterly Census of Employment and Wages (QCEW) appears to more consistent with the payroll data than the household data.  So although it is possible that the payroll employment figures will eventually be revised downward, it appears unlikely that they will be revised to show anywhere near the job losses that the household data are showing.

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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 at the following links:  September and  October.

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October Home Sales

By , November 20, 2013 1:16 PM

The residential real estate market is experiencing its typical autumn slowdown, but the notable recovery of home sales in 2013 continues.  New data from the Arkansas Realtors® Association reported another strong month, with October home sales up 13.9% the previous year.   For the year to date, sales are up 12.3% from the 2012 pace.

Source: Arkansas Realtors® Association

As shown in the following chart, September and October have not been as phenomenally strong as the August sales total, even after seasonal adjustment.  Nevertheless, recent monthly totals are well above the plateau that characterized home sales in 2011 and 2012.

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

At the Arkansas Economic Forecast Conference, we predicted that 2013 sales would end the year 13.8% higher than 2012.  This remains a likely outcome.  Even if sales in the last two months of the year dropped to 2011-2012 levels, this year would still show cumulative double-digit growth.

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September Home Sales – Another Strong Month

By , November 1, 2013 1:39 PM

The Arkansas Realtors® Association reported another strong month of home sales:  Total sales in September were up 18.4% compared to a year earlier.  As is typical for September, sales volume was down from the peak summer months, but this was the highest total for September since 2009 when we were approaching the deadline for the first home-buyers’ tax credit.  Not counting 2009, this was the best September sales month since 2006.

Source: Arkansas Realtors® Association

With year-over-year growth rates exceeding 18% in each of the last three months, the third quarter represented a significant break-through in the housing market recovery.  As shown in the chart below, quarterly seasonally adjusted sales have shown a clear upward trend since throughout 2013, showing a particularly large increase in the third quarter.

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

Home sales represent one of the sectors that has performed atypically during the current recovery.  The housing crash was an important precipitating event of the 2008-09 recession, and housing (particularly home construction) has not played its usual role as a driving force of economic recovery.  The long-awaited pick-up in home sales this year is therefore a positive sign of an improving outlook for the Arkansas economy in general.

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Arkansas Personal Income – New and Revised Data

By , October 25, 2013 1:23 PM

Arkansas personal income increased by 0.6% in the second quarter, compared to a 1.0% increase in the U.S. data.  Compared to a year earlier, Arkansas personal income was up 2.1%.  Nationwide, the four-quarter increase was 2.6%.

The most recent report also incorporated the latest comprehensive (benchmark) revision of the data.  As illustrated in the chart below, the newly revised data suggest that the drop in incomes during the 2008-09 recession was slightly less severe – but more protracted – than indicated by the pre-revision data.  Previously-published data showed a peak-to-trough decline of 4.7% (from 2008:Q2 through 2009:Q3).  The new data show a downturn off only 3.5% for the same period, but with a slower trajectory of recovery through 2010.  Since the beginning of 2011, however, the revised data show a slightly higher growth rate than previously reported.

Source: Bureau of Economic Analysis

Data for U.S. personal income were also revised, altering the comparison of Arkansas and U.S. income growth during the recession and recovery.  As shown in the next figure, the new data suggest that the downturn in Arkansas was nearly as large as the U.S. average.  Previously, the data suggested that Arkansas’ downturn was not as severe as the nation’s.  On the other hand, the upward revision to Arkansas data in 2011 and 2012 now indicates that Arkansas is on a more rapid path of recovery than the nation as a whole.  As of the second quarter of 2013, personal income in Arkansas is 12.9% higher than its pre-recession peak.  U.S. personal income has shown a net increase of 11.9% over the same period.

Source: Bureau of Economic Analysis

The newly-revised data had little impact on estimates of how recent changes in tax policy has affected personal income growth (see previous post).  The expiration of the payroll tax holiday at the beginning of the year is estimated to have lowered first quarter growth by approximately 0.9%.  The surge in dividend income in the fourth quarter of 2012 (to avoid higher income tax rates in 2013) added at approximately 0.7% to end-of-year income — subtracting a commensurate amount from first quarter growth.  Combined, these two effects reduced first-quarter growth by 1.6%.  The reported first-quarter growth rate of -0.9% (revised) would have been approximately +0.7% in the absence of these changes in tax policy.

Sources: Bureau of Economic Analysis, Institute for Economic Advancement

Adjusting for the expiration of the payroll tax holiday.  Income growth from 2012:Q2 through 2013:Q2 would have been approximately 3.1% for Arkansas and 3.6% for the U.S.

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Note:  Our analysis of the second-quarter personal income data was delayed by the Federal government shutdown.  The data were originally released on September 30, but were inaccessible from October 1 through October 16 while the website of the Bureau of Economic Analysis was non-functional.
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Metro Area Unemployment Rates – August 2013

By , October 22, 2013 12:13 PM

Catching up from the federal government shutdown, the Bureau of Labor Statistics released August unemployment rates for the nation’s Metropolitan Statistical Areas (MSAs) yesterday.  The data were originally scheduled to come out on October 2.

For Arkansas’ metro areas, the results were decidedly mixed.  The not-seasonally adjusted data showed year-over-year unemployment rate changes that ranged from +0.6% in Pine Bluff to -0.7% in Fort Smith.  From August 2012 to August 2013, the unemployment rate declined in three MSAs and increased in four.  In Little Rock (and statewide) the rate was unchanged.

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

Monthly changes – calculated using smoothed seasonally adjusted estimates — were also mixed.  From July to August, the unemployment rate declined in Fort Smith, Memphis and Texarkana.  It was up one-tenth in Pine Bluff, and unchanged in the remaining metro areas.

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

Note:  Payroll employment statistics were compiled before the government shutdown, and were previously reported on Arkansas Economist (here).

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August Home Sales

By , October 8, 2013 12:01 PM

The August report from the Arkansas Realtors® Association (ARA) confirms that residential real estate markets in Arkansas are finally recovering from the recession/housing-crash.  And the recovery is substantial:  Sales for August were up 24% compared to August of last year.  Cumulative year-to-date figures show sales rising 12.7% from 2012.  As shown in the chart below, the August sales total of 2,818 was the highest single monthly total since the onset of the recession.  The last time sales exceeded 2,800 in a single month was August 2007.

Source: Arkansas Realtors® Association

The August sales figures represent the final month of the typical June-July-August peak period for home sales.  As is evident from the not-seasonally adjusted data, sales typically taper-off during the remaining months of the year.  But even at the slower expected pace for the remainder of the year, 2013 sales are likely to approach 26,000 — the highest annual sales volume since 2007.  For the year as a whole, a growth rate approaching 10% would not be surprising.

Seasonally adjusted data–shown below–reveal that the pace of home sales has been accelerating over the past few months.  Even with the rising trend, the August sales figure represents a clear break-out.

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

Data for individual counties shows that strong sales growth is a state-wide phenomenon.  Northwest Arkansas continues to be the strongest region in the state.  Combined sales for Benton and Washington Counties are up 21.9% year-to-date.  Among the eight counties with the highest sales volume, Pulaski County is the only one showing less than double-digit growth.  Nevertheless, the combined growth rate for the Central Arkansas counties of Pulaski, Saline, and Faulkner is 12.0%.

Source: Arkansas Realtors® Association

 

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Metro Area Employment – August 2013

By , October 3, 2013 1:29 PM

Yesterday was the scheduled release date for metro area employment and unemployment data from the Bureau of Labor Statistics, but no report was published due to the Federal government shutdown.  Nevertheless, data on payroll employment for metro areas had already been posted on the BLS website, so we do have some new figures to report.

As previously reported, statewide payroll employment declined by 1,200 jobs in August — approximately 0.1%.  The table below shows that employment declines were spread across several of the state’s metro areas.  Job losses were particularly sharp in Jonesboro (-0.6%), Hot Springs (-0.5%), and Texarkana (-0.5%).  Employment in Northwest Arkansas was unchanged from the previous month, and both Little Rock and Pine Bluff saw small employment increases.

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

Over the past year, employment growth has been positive for most of the state’s metro areas, with the prominent exceptions of Hot Springs and Pine Bluff.  Since the national and state employment trough of February 2010, all metro areas except Pine Bluff have seen net increases.  Compared to pre-recession employment levels, however, only Fayetteville, Jonesboro, and Little Rock have experienced net positive job growth.

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Arkansas Employment and Unemployment – August 2013

By , September 20, 2013 11:03 AM

Another disappointing employment report for Arkansas:  The latest data from the U.S. Bureau of Labor Statistics and the Arkansas Department of Workforce Services show that unemployment was up again in August, but not enough to raise the unemployment rate from the 7.4% level of July.  Over the first 8 months of 2013, the unemployment rate has crept up by 0.3%, while the number of unemployed has increased by 2,710.  The number of employed from the household survey declined by 5,322 in August, contributing to a net loss of 27,490 since December of 2012.

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

Payroll Survey:
The report on nonfarm payroll employment for Arkansas was no more encouraging.  The net change in employment from July to August was -1,200 (seasonally adjusted).  Employment was lower in most sectors, including a declines of 600 in Construction and 800 in Wholesale Trade.  Two sectors did show month-over-month increases:  Financial Activities (+700) and Manufacturing (+900).  Over the past 12 months, we’ve seen healthy gains in Retail Trade, Education & Health Services, and Transportation & Utilities, but several sectors have seen declines.  Notably, the goods-producing sectors have continued to show net declines.  Compared to August 2012, payroll employment has increase by just 12,200 — approximately 1.0%.

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

The household data and payroll data continue to provide conflicting signals:  As shown in the figure below, payroll employment has continued to trend upward (albeit slowly and irregularly), while the household employment measure has been falling since the beginning of 2012.  It seems likely that the annual benchmark revisions to the payroll data will ultimately be negative, bringing the two employment measures into closer alignment.  With the release of the Quarterly Census of Employment and Wages next week, we are likely to see some evidence supporting this conjecture.

Source: Bureau of Labor Statistics

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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, are available hereTable – Seasonally Adjusted NFPE.

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