Arkansas GDP in 2013

By , June 11, 2014 2:52 PM

The Bureau of Economic Analysis announced this morning that Arkansas GDP growth in 2013 was 2.4%, up from a revised growth rate of 1.1% in 2012.  Arkansas’ growth rate was well above the national average of 1.8%, and ranked #16 among the 50 states. gsp_0614

Today’s report included a comprehensive set of revisions that affected the data going back to 1997. Although Arkansas’ growth rate in 2012 was revised downward, the revisions generally paint a picture of stronger long-term growth for the state.  As shown in the figure below, the immediate post-recession years of 2010 and 2011 saw much stronger growth than previously estimated.  Growth in 2003 through 2008 was also revised upward.  Cumulatively Arkansas GDP growth is now reported to have increased by 28.3% over the 10 years from 2002-2012, up from a previously-reported total of 16.5%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

After the data revisions, Arkansas growth over the past several years is now estimated to have exceeded that of the U.S. as a whole.  The 2009 drop in output was previously estimated to have been smaller than the national average, but it is now reported to have been about the same (-2.7%).  Nevertheless, stronger growth in the decade before the recession — as well as in 2010 and 2013 — result in a significant cumulative improvement for Arkansas.  In per capita terms, Arkansas real GDP (in 2009 dollars) increased from $33,828 in 2003 to $39,111 in 2013 (an increase from 73.7% of the national average to 79.6%).

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Over half of Arkansas’ growth in 2013 came from natural resource sectors:  Agriculture, forestry, fishing and hunting contributed over half of a percentage point to total growth and Mining accounted for more than a full percentage point.  The BEA news release noted that these sectors figured prominently in national growth patterns.  The Agriculture, etc. component contributed positively to growth in 49 states plus the District of Columbia.  Mining “was not a significant contributor to real GDP growth for the nation,” but it did boost the growth rates of some of the fastest growing states in the nation.  For example, mining accounted for 3.61 percentage points of North Dakota’s 9.7 percent growth.

Some sectors in Arkansas’ economy remain relatively weak, however.  Construction had a positive contribution to growth nationwide, but subtracted from growth in Arkansas.  Manufacturing in Arkansas showed essentially zero growth over the year, while it added 0.4% to the U.S. growth rate.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

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Metro Area Unemployment & Employment – April 2014

By , May 28, 2014 4:42 PM

The national and state unemployment reports for April had shown a distinctive combination of statistics:  relatively large declines in unemployment rates, accompanied by sharp drop-offs in labor force participation.  Data for Arkansas metro areas released this morning show the same pattern.

Compared to a year ago, unemployment rates have dropped significantly.  The not-seasonally adjusted data in the table below show declines ranging from 0.8% in Fayetteville and Little Rock to 1.9% in Memphis.  According to this morning’s news release, Arkansas’ metro areas were among the 357 of 372 metro areas nationwide that experienced declining unemployment rates over the past 12 months.

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

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

As was true for the state and national data, monthly changes in the unemployment rate were uncharacteristically large.  According to the smoothed seasonally adjusted data shown below, unemployment rates dropped by as much as 0.4% in Memphis and Pine Bluff.

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

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

But the April declines in unemployment rates are not unambiguously positive news.  As was the case with the state and national data, the changes in metro area unemployment rates were driven by declining labor force participation.  The smoothed-seasonally adjusted data show labor force declines in April ranged from 0.3% in Memphis to 0.8% in Fort Smith.  The concern is that the unemployment rate is not falling because more unemployed are finding jobs, but because more unemployed are becoming discouraged and leaving the labor force (or the state).

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

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

Payroll Employment
The data from the separate survey of employers does little to assuage concerns about the employment statistics from the household survey.  Monthly changes in nonfarm payrolls were mixed around the state:  employment declined in Fort Smith, Memphis and Pine Bluff, but increased in the state’s other metro areas.  Nevertheless, year-over-year gains have generally been modest.  Jonesboro and Fayetteville have seen sizable gains in employment over the past 12 months, but gains in the state’s other metro areas have been relatively small.  Employment in Pine Bluff continues to decline.  Compared to pre-recession employment levels, only Fayetteville and Jonesboro have surpassed previous peaks.

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

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

The April employment statistics represent just one monthly observation.  Recent employment reports have painted a picture of improving labor market conditions–with unemployment falling and labor force participation rising.  The April data broke from these patterns, but it is too soon to say whether this represents a weakening of previous trends or simply a one-month anomaly.

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Arkansas Home Sales – April 2014

By , May 28, 2014 1:43 PM

New data from the Arkansas Realtors® Association shows an increase in Arkansas home sales in April, up 8.2% from the previous year. This year’s increase builds on strong momentum from last year as well:  Comparing April 2014 to April 2012, sales have risen by nearly 25%.  For the first four months of the year, cumulative sales are up 10.2% from 2013 and up 20.4% from 2012.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Among the ten largest counties reported, the strongest year-over-year cumulative sales increases are in Sebastian County (+23.3%) and Benton County (+17.1).   Three counties have seen slight sales declines so far in 2014 — Craighead, Faulkner and Lonoke.   However, when we compare 2014 cumulative sales to two years ago, gains are more widespread.  Eight of the top ten counties have experienced double-digit growth over the past two years, with Benton and Sebastian Counties showing increases of over 36%.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The strong seasonality of home sales implies that the summer months are crucial for annual sales totals.  Upcoming reports for May, June, and July will be important for assessing ongoing momentum in Arkansas’ residential real estate markets.

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Arkansas House Prices – 2014:Q1

By , May 27, 2014 2:41 PM

New data from the Federal Housing Finance Agency shows Arkansas house prices rising, albeit at a slower trend than the rest of the nation.  The most comprehensive of the FHFA’s house price indexes — the Expanded-Data Index — shows that Arkansas house prices rose 1.6% in the first quarter of 2014, slightly higher than the 1.4% pace for the U.S.  Over the past four quarters, however, Arkansas prices have risen a total of only 0.9%, compared to a nationwide rate of 7.0%.  Since the trough in house prices in 2011:Q2, prices in Arkansas have risen by 10%, while the average U.S. increase was 15.5%.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

The slower rate of appreciation in Arkansas house prices mirrors a slower rate of depreciation during the house-price collapse of 2007-11.   From 2007:Q1 through 2011:Q2, house prices in Arkansas declined 14%, while average prices for the U.S. declined by over 25%.  In markets where price declines are the largest, the rate of recent appreciation has been the most rapid.  For example, prices in Arizona declined by 46% from 2007 to 2011, and have recovered by 31% since.

The same general pattern is true for metropolitan areas within Arkansas.  The Fayetteville-Springdale-Rogers metropolitan area suffered the largest price declines in the state, dropping by nearly 20% during the period of depreciation (FHFA All-Transactions index).  Since 2011:Q2 prices in Northwest Arkansas are up 8.1%.  Meanwhile, prices in the Little Rock metro area are up only 3.3% from trough, after a net decline of only 1.2% during the nationwide house price decline.

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

House prices in Arkansas’ other metro areas have generally changed little over the past several years.  Prices in Pine Bluff, Fort Smith, Jonesboro and Hot Springs continued to appreciate after the nationwide peak in early 2007, but only Texarkana and Jonesboro have seen positive appreciation over the most recent 5-year period.  More recently, prices have been weakening in Jonesboro (down 2.2% over the past year) and in Hot Springs (down 3.5%).

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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Arkansas Employment and Unemployment – April 2014

By , May 16, 2014 3:04 PM

The unemployment rate in Arkansas fell three-tenths of one percent in April to 6.6%, the lowest unemployment rate since December 2008.  The relatively sharp decline corresponds to a 0.4% drop in the national unemployment rate in April.  For both the state and the nation, however, the news of a sharp declines in unemployment rates is not unambiguously positive:  the declines took place in the context of sharp drops in the size of the labor force.  For Arkansas, specifically, the number of unemployed declined by over 5,000 but there was no corresponding increase in household employment.  In fact, the number of employed declined by 3,200.  Although the report represents only one month of data, the concern is that the drop in unemployment was caused by discouraged workers leaving the labor force (or the state).

Over a slightly longer term perspective, April represents a set-back relative to the positive trends that have prevailed for the past several months.  Since August 2013, the number of employed is still up by more than 12,800 and the number of unemployed is down by 15, 280.  But these changes imply that the labor force has declined, on net, by over 2,400.

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

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

Payroll Employment
Data from the payroll survey concurred with the household survey’s lack of employment growth:  Nonfarm payroll employment declined slightly in April (-500, seasonally adjusted).  Declines were spread across several service-providing sectors, including a drop of 1,300 in Leisure & Hospitality services.  On the other hand, goods-producing sectors added jobs in April.  Manufacturing and Construction showed gains for the month, and employment in both sectors remain higher than levels of a year ago.

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

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

# # #

*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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Arkansas Taxable Sales – 2014:Q1 (Preliminary*)

By , May 7, 2014 4:06 PM

Preliminary data on Arkansas sales and use tax collection show that Arkansas Taxable Sales (ATS) increased by 2.1% in the first quarter of 2014 (seasonally adjusted).  The first quarter increase follows two consecutive quarterly declines in the second half of 2013.  Incorporating information on gasoline prices and sales, a broader measure of sales — Arkansas Taxable Sales Including Gasoline (ATSIG) — increased by 2.2%.

On a year over year basis, ATS was up 3.6% and ATSIG was up 2.8%.  From the trough of the recession (2009:Q2) through the most recent quarter, ATS and ATSIG have expanded at average annual rates of 3.2% and 3.7%, respectively.

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

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

# # #

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 2014:Q1(P) (Excel file)

* Data are preliminary until the release of the DFA report, Arkansas Fiscal Notes for April 2014, and will be updated when information becomes available.

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Home Sales – March 2014

By , May 6, 2014 3:05 PM

New home sales data that came out last week showed that the number of closings in March 2014 was unchanged from March 2013.  Although year-over-year growth was zero for the month, momentum is still positive.  A year ago, the March report gave the first indication that 2013 would be a year of strong sales growth, so it is not necessarily disappointing that March of this year had the same sales pace.  Moreover, wintery weather in January and February is likely to have contributed to a somewhat lower volume of closings in March than would otherwise be the case.  Even with the cold weather, cumulative sales for the first three months of the year were up nearly 6% over the previous year.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The rising trend in home sales is more apparent in the following figure, which shows quarterly averages of  seasonally-adjusted data.  With the recurring seasonal patterns and monthly volatility removed, it is clear that first-quarter sales represent ongoing recovery of the residential real estate market.

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 – March 2014

By , April 29, 2014 2:49 PM

Unemployment rates were lower in March than a year earlier in all of Arkansas’ metropolitan areas.  With the annual revisions now complete, estimates of metro unemployment rates for late 2012 and early 2013 are now generally reported to be 0.3 to 0.5 percentage points higher than previously published.  Consequently, the newly-published unemployment rates are, in some cases, not much lower than the rates initially reported a year ago.  But with the revised statistics, year-over-year declines in unemployment range from 0.3% in Fayetteville to 1.2% in Fort Smith and Memphis.  Over the same period, the statewide unemployment rate declined by 0.5%.

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

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

Smoothed seasonally adjusted estimates for March show monthly declines in seven of eight metro areas in Arkansas, with Fayetteville’s rate unchanged from February to March.  The largest monthly declines were in Hot Springs and Texarkana.

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

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

The figure below shows time-series for the smoothed seasonally-adjusted estimates.  Unemployment rates have declined substantially in all of Arkansas’ metro areas over the past 3 to 6 months.  The largest declines were generally in metro areas with the highest unemployment rates.  Since September 2013, rates in Memphis, Hot Springs and Fort Smith declined by a full percentage point or more.  As of March, all metro areas except Memphis and Pine Bluff had unemployment rates below 7%.

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

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

Payroll Employment
Nonfarm payroll employment increased in four of eight Arkansas metro areas in March.  Employment declined for the month in Fayetteville, Fort Smith, and Hot Springs, and was unchanged in Pine Bluff.  The largest gain was in Texarkana, where a 1.5% increase offset losses from the previous 11 months.  Compared to a year ago, employment was up in six metro areas, with the largest increase in Jonesboro (+3.5%).  Compared to pre-recession levels, employment is higher in only two metro areas:  Fayetteville and Jonesboro.  Statewide, employment remains 1.5% below its level in December 2007.

Source:  Bureau of Labor Statistics, Current Employment Statistics

Source: Bureau of Labor Statistics, Current Employment Statistics

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Regional Price Parities and Income – New Data for 2012

By , April 24, 2014 4:53 PM

When the 2013 data on state personal income were recently released, we noted that per capita income in Arkansas was approximately 81% of the national average — essentially unchanged from the previous year.  But when it comes to purchasing power, incomes in Arkansas imply a higher standard of living than suggested by the 81% figure.

This morning, the Bureau of Economic Analysis released their first official set of statistics on Real Personal Income for States and Metropolitan Areas. (Experimental data had previously been released for years prior to 2012, see here and here).  The data confirmed that the cost of living is significantly lower in Arkansas than elsewhere in the U.S.  The overall price parity figure for Arkansas was 87.6, implying that prices were approximately 12½% lower than the nationwide average in 2012.   Adjusting incomes for this difference in the cost of living, Arkansas real incomes have a purchasing power that is 92.6% of the U.S. average.

As shown in the figure below, the 2012 statistics showed Arkansas to be the second-lowest cost state in the nation.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Regional price parities are generally lower in non-metropolitan areas than in metropolitan areas, and tend to be higher in the larger metro areas.  Differences in goods prices tend not to vary geographically as much as prices for services, and much of the regional variation in prices is driven by differences in rent costs.  The table below illustrates these patterns for Arkansas, breaking down prices of goods and services for metro- and non-metro areas of the state.   In the non-metro portions of the state, prices are generally 15% lower than the national average, led by rental costs that are just over half the U.S. mean.  The most expensive areas of the state are Memphis, Little Rock, and Fayetteville, each with an overall price parity exceeding 90.0.  Among metro areas, Jonesboro has the lowest cost of living.  In fact, today’s announcement from the Bureau of Economic Analysis showed Jonesboro to be fourth on the list of the most inexpensive metro areas in the nation.

Source:   Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

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Arkansas Employment and Unemployment – March 2014

By , April 18, 2014 1:03 PM

The unemployment rate in Arkansas dropped 2-tenths of 1 percent in March, falling to 6.9%. Today’s reports from the Bureau of Labor Statistics and the Department of Workforce Services represented the seventh consecutive month in which the number of the state’s unemployed declined and the number employed increased.  Since August of last year, the number of unemployed has fallen by over 10,000 and the number of employed has increased by 16,000.  With the unemployment rate below 7% for the first time since January 2009, the unemployment rate is now only 2-tenths of a percent higher than the nationwide average.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
February payroll employment totals were revised downward by 2,200, but the March figures were up 1,200 from the revised level.  Since August 2013, payroll employment has increased by 17,000.  As shown in the table below, employment increased in every non-government service sector in March.  In the not-seasonally adjusted data reported by the Department of Workforce services, construction and manufacturing were also up for the month, but those gains were attributable to typical spring rebound effects.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Compared to a year ago, payroll employment is up 12,900, with increases in nearly every sector.  Total employment remains 17,800 below pre-recession levels.

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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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