Arkansas Taxable Sales – 2018:Q2

By , August 13, 2018 8:55 AM

Arkansas Taxable Sales (ATS) rebounded in the second quarter of 2018, increasing by 1.8% after a 1.5% decline in the first quarter .  Compared to a year earlier, ATS was up 2.9%.  After adjusting for inflation, the year-over-year increase amounts to a real gain of only 0.8%.

Including gasoline purchases, Arkansas Taxable Sales Including Gasoline (ATSIG) expanded by 2.0% in the second quarter and was up 4.0% from a year earlier.  The relative strength in gasoline sales has been driven by higher prices:  The average gasoline price in Arkansas in the second quarter was $2.57, up from $2.33 in the first quarter and $2.11 in the second quarter of 2017.  Accordingly, spending on gasoline increased by 5.6% in the second quarter and was up 23.2% from a year earlier.  From 2017:Q2 through 2018:Q2 gasoline sales increased from 5.0% to 5.9% of total ATSIG.

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Since the trough of the Great Recession both ATS and ATSIG have expanded at annual rates of approximately 3%.  Over the same period, inflation (as measured by the PCE price index) has averaged 1.6%.  Consequently, real spending has been growing at a pace of about 1.4%.

# # #

Arkansas Taxable Sales (ATS) is calculated by the Arkansas Economic Development Institute 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 monthly and quarterly data is available here: Arkansas Taxable Sales 2018:Q2 (Excel file).

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Metro Area Employment and Unemployment – June 2018

By , August 1, 2018 1:32 PM

In the latest metropolitan area data from the Bureau of Labor Statistics (BLS), unemployment rates ticked lower from May to June in two of the metro areas that include parts of Arkansas, were slightly higher in four areas, and were unchanged in two.  Unemployment rates are little changed from a year ago, with the exception of Texarkana where the unemployment rate now stands at 0.8 percentage points higher than in June 2017.  In fact, the news release from the BLS notes that the increase in Texarkana was the largest in the nation.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS), Seasonally adjusted metropolitan area estimates

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS), and Seasonally Adjusted Metropolitan Area Estimates

As shown in the figure below, unemployment rates in both Texarkana and Memphis have been trending upward since the end of 2017, with Texarkana up by nearly a full percentage point over the first six months of 2018 (seasonally adjusted).  Meanwhile, rates in Northwest Arkansas are trending somewhat lower, with the unemployment rate in Fayetteville-Springdale-Rogers metro area declining from 2.9% in December 2017 to 2.6% in June.  The eight metro areas have evidently converged into three groups:  Texarkana and Pine Bluff have the highest rates — with unemployment rates in both areas now above 5%.  Memphis, Hot Springs and Fort Smith have settled-in at just over 4% while Little Rock, Jonesboro and Fayetteville have fallen into the neighborhood of 3%.

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

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

Payroll Employment
Figures on nonfarm payroll employment were mixed.  The three metro areas that have seen employment expand the most over the current expansion (Fayetteville, Jonesboro, and Little Rock) all experienced monthly declines in June.  Pine Bluff was also down for the month.  Compared to a year ago, all of Arkansas’ metro areas except Pine Bluff are showing unchanged or higher employment.

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

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

Over the longer run, employment growth trends among the state’s metro areas continue to diverge.   Jonesboro and Fayetteville still lead the pack with employment up nearly 20% and 24%, respectively, since the previous cyclical peak at the end of 2007.  Little Rock and Memphis are also in positive territory, albeit with significantly smaller cumulative gains.  The other four metro areas continue to show net employment declines from the pre-recession levels of a decade ago.  Pine Bluff, in particular, has suffered dramatic cumulative job losses, with employment falling by 12.4% since the beginning of the current expansion’s employment recovery (February 2010).

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

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

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Arkansas GDP – 2018:Q1

By , July 24, 2018 12:16 PM

State-level GDP data for the first quarter of 2018 showed zero growth in Arkansas, placing the state 49th among the 50 states (North Dakota experienced a decline of 0.6%).  The comparable value for U.S. GDP growth in Q1 was 1.8%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Over the past four quarters Arkansas GDP expanded by 0.7%, well-below the U.S. average of 2.6%.  As shown in the figure below, Arkansas growth rate has lagged the nation since at least 2014.  From the beginning of 2014 through 2018:Q1, the growth rates of Arkansas and the U.S. have averaged 1.0% and 2.4%, respectively.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The breakdown of GDP growth by sectors shows that Arkansas’ weakness was largely attributable to the Agriculture, forestry, fishing, and hunting component, which subtracted nearly 0.7 percentage points from overall growth.  Other sectors dragging down Arkansas growth included Wholesale trade and Government.   Several sectors contributed positively to growth, including Manufacturing, Retail trade, Finance and Real estate, and Health Care.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The slow growth of Arkansas GDP in recent quarters is cause for some concern, but the initial quarterly estimates are subject to considerable revision.  Just six months ago the data were showing Arkansas outpacing the nation with a four-quarter growth rate of 3.6% (2016:Q3-2017:Q3).  The latest information show Arkansas growth rate to have been only 1.4% over that same period.

Later this week (July 27) the BEA will release statistics from the latest comprehensive update for national GDP, but the state-level revisions will not be available until the next quarterly release date on November 14.   Until then, this latest release represents the best information available, and it suggests that the Arkansas economy got off to a relatively slow start in 2018.

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Arkansas Employment and Unemployment – June 2018

By , July 20, 2018 11:44 AM

Arkansas’ unemployment rate held steady at 3.8% in June as both the number of employed and the number of unemployed declined.  In contrast, the U.S. unemployment rate ticked up 0.2 percentage points to 4.0% as nationwide labor force participation increased.  This was the ninth consecutive monthly declines for household employment labor force participation in Arkansas.  The number of unemployed has now declined for the past two months.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm payroll employment increased by 1,500 in June and the preliminary May figure was revised upward by 1,100 (seasonally adjusted data*).  Employment in Professional & Business Services increased by 3,000 jobs — mostly in the Administrative & Support Services component (+2,300).  Other sectors gaining jobs included Construction, Financial Services, and Education & Health Services.   The not-seasonally adjusted data showed large declines in both Government and Educational Services, but these were primarily due to the start of summer break at public and private schools and universities.  Declining sectors included Leisure and Hospitality Services as well as all components of Trade, Transportation and Utilities.  Compared to a  year ago, employment is up overall in both the goods-producing and service-providing sectors.  Especially encouraging is the ongoing growth in Manufacturing and Construction.  In services, the growth sectors continue to be Professional & Business Services and Educational and Health Services.

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

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

Two Measures of Employment Growth
As the data for 2018 accumulate, it is becoming more evident that the two sources of employment data are providing conflicting signals.  As shown in the figure below, the trend growth rates for these two measures have generally been moving together up through the end of 2017.  Over the first six months of this year, however, data from the payroll survey has increased by 0.7% while the household survey data show a decline of 0.6%.  Of the two measures, the payroll survey is generally considered to be more accurate, although both are subject to revision as more information becomes available.  Based on the payroll data available to-date, it appears that employment growth is showing signs of recovery from a period of very slow growth near the end of 2017.

Source: Bureau of Labor Statistics

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, can be found here:  Table-Seasonally Adjusted NFPE.

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Metro Area Employment and Unemployment – May 2018

By , June 28, 2018 4:43 PM

Unemployment rates in Arkansas metro areas were essentially unchanged in May, rising slightly in Fort Smith, Little Rock and Memphis and declining in Hot Springs and Pine Bluff (seasonally adjusted data).  Rates have changed little over the past year, with the largest 12-month increase being Pine Bluff’s 0.4% rise and the largest decline being -0.3% in Memphis.  The prevailing pattern across the various metro areas shows that Fayetteville, Jonesboro and Little Rock have unemployment rates below the statewide average with the other five metros above average.  The highest rate in the state is Pine Bluff at 5.1%.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics; and  Seasonally Adjusted Metropolitan Area Estimates

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics and
Seasonally Adjusted Metropolitan Area Estimates

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

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

Payroll Employment
Nonfarm payroll employment increased in seven of the eight metro areas covering parts of Arkansas in May, with the only exception being a small (-0.1%) decline in Fort Smith.  Northwest Arkansas led the pack with a monthly increase of 0.6% — a pace that corresponds to a 7.7% annual rate!  Jonesboro, Little Rock and Pine Bluff all registered substantial gains as well.  Compared to a year ago, only Fort Smith and Pine Bluff have shown small (and insignificant) declines, with employment up in all other metro areas.  Nevertheless, compared to the level of employment prior to the 2008-09 recession, only four of the eight metro areas have seen net  gains:  Employment remains below the levels recorded in December 2007 in Fort Smith, Hot Springs, Pine Bluff and Texarkana.

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

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

 

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Arkansas Personal Income – 2008:Q1

By , June 22, 2018 3:25 PM

The latest data on Arkansas personal income indicated a disappointingly slow growth rate in the first quarter of the year.  Total personal income increased at an annual rate of only 2.5% from 2017:Q1 to 2018:Q2, compared to the national average rate of 4.3%.*  Only one state registered a lower growth rate (Idaho at 2.0%).

Personal income growth was lower than the U.S. average in nearly every major component.  Farm income was particularly weak, declining at a 35.5% rate relative to the fourth quarter.  Farm income is a fairly small component of total personal income, however, and can be highly variable from quarter to quarter.  All components of Earnings by Place of Work increased at lower rates than the national figures, with Proprietors’ income declining at a 5.5% rate in Arkansas while increasing at a rate of nearly 5% nationally.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The only major component for which Arkansas outpaced the nation was Dividends, interest and rent (DIR).  Although the data represent only one calendar quarter, the 2018:Q2 growth rates contribute to an ongoing trend of divergence between DIR, on the one hand, and Wages & salaries (WS) on the other.  As illustrated in the figure below, since the beginning of 2010 the DIR component of personal income has grown far more rapidly than total personal income — and has grown more rapidly in Arkansas than in the rest of the nation.  From 2010:Q1 through 2018:Q1 the growth rates for Arkansas and the U.S. were 7.5% and 5.7%, respectively.  In contrast, WS growth over the same period has averaged only 3.2% in Arkansas while growing a a rate of 4.1% nationally.  So not only is DIR growth far exceeding WS growth, but the gap is wider in Arkansas than elsewhere across the nation.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The upshot of this pattern of growth is that wage and salary growth has only accounted for 37.7% of total personal income growth in Arkansas since 2010, while it has accounted for over half of total income growth nationwide.  In contrast, the DIR component accounts for about one-quarter of total personal income growth nationwide, but accounts for over 35% of Arkansas’ income growth.  So although the growth rate of total personal income in Arkansas has closely tracked the national average for the past eight years (at just over 4.0% annually), a far greater share of the income gains has gone to owners of capital, rather than to wage earners.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis, Author’s calculations

In recent quarters, the disparity between DIR and WS growth appeared to be dissipating. The strength of DIR in the first quarter might be just a blip in the data, or it may indicate a resurgence of rapid growth in that income component going forward.  We’ll continue to monitor the growth rates of these income components as more information becomes available.

# # #

*In the news release that came out yesterday, the BEA initiated a practice of expressing quarterly personal income growth in terms of annualized percentage changes (as is done for GDP and other economic aggregates).  We will henceforth follow that convention here as well.

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Arkansas Employment and Unemployment – May 2018

By , June 15, 2018 1:26 PM

The May data on employment and unemployment in Arkansas continues to suggest that we’ve been through a period of weakening in the state’s labor markets.  However, the latest report from the Bureau of Labor Statistics also included some encouraging signs of of improvement.

The unemployment rate was unchanged for the third consecutive month.  With recent declines in the national unemployment rate, the unemployment rates for both Arkansas and the U.S. stand at the historically low rate of 3.8%.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

However, recent weakness in employment is evident in the components of the unemployment rate.  Data from the household survey shows that the number of employed Arkansans was down for the eighth consecutive month and has now dropped below 1.3 million for the first time since early 2017.  The weakness in employment also shows through to labor force participation, which has also declined for eight months.  One bright spot is the number of unemployed, which ticked downward slightly in May after creeping upward during the previous four months.  With the most recent observation included, the trend suggests that the number of unemployed is fairly stable at just over 50,000.

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 showed a healthy gain of 3,700 in May (seasonally adjusted*).  The fact that the year-over-year increase in payrolls is only 6,600 demonstrates that the May increase represents an acceleration from the recent pace of job growth.  Over the first five months of 2018, payroll employment has increased by 6,200 — more than offsetting the 4,900 decline reported for the final two months of 2017.  Nevertheless, employment in Arkansas is expanding at a substantially slower pace than the national average.  In percentage terms, Arkansas payroll employment has increased by 0.5% over the past 12 months, while national payrolls have expanded at a 1.6% pace.

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

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

The breakdown of employment growth by sector shows some continued weakness in service-providing sectors with monthly declines in Financial Services, Professional & Business Services, and Other Services.  Employment in Leisure and Hospitality Services was unchanged from the previous month and has shown no significant growth over the past year.  On the other hand, Education and Health Services showed a strong gain of 1,200 jobs in May, primarily in the Health Care and Social Assistance component.  Another encouraging figure is the growth of Manufacturing employment — up by 800 jobs in May and up 3,500 from a year ago.  In fact, growth in Manufacturing employment accounts for over half of the state’s job growth over the past 12 months.  Both the Durables and Non-durables components of manufacturing employment have been increasing, up by 1,200 and 2,300 jobs, respectively.

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 here:  Table-Seasonally Adjusted NFPE.

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Arkansas Taxable Sales – 2018:Q1

By , June 6, 2018 1:00 PM

Arkansas Taxable Sales (ATS) declined by 1.5% in the first quarter of 2018 (seasonally adjusted), but remained 2.9% higher than a year earlier.  Derived from data on Arkansas Sales and Use tax collections, ATS is a measure of statewide consumer spending.  Another important component of consumer spending – gasoline purchases – was boosted by higher prices in the first quarter:  On average, gasoline prices were $2.33 per gallon in Arkansas, up from $2.24 in the fourth quarter of 2017.  Total spending on gasoline was up 2.2%.  As a result, Arkansas Taxable Sales Including Gasoline (ATSIG) experienced a smaller decline than did ATS – down 1.4% in the first quarter.  Compared to a year earlier, ATSIG was up 3.1%.

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute

Since the trough of the “great recession” in 2009:Q2, both ATS and ATSIG have increased at annual rates of 2.9%.  After adjusting for inflation of 1.6% per year, “real” taxable sales have increased at a rate of only 1.3%.

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, U.S. Bureau of Economic Analysis, Arkansas Economic Development Institute

Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, U.S. Bureau of Economic Analysis, Arkansas Economic Development Institute

# # #

Arkansas Taxable Sales (ATS) is calculated by the Arkansas Economic Development Institute 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 monthly and quarterly data is available here: Arkansas Taxable Sales 2018:Q1 (Excel file).

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Metro Area Employment and Unemployment – April 2018

By , May 30, 2018 4:43 PM

Unemployment rates in Arkansas metropolitan areas showed mixed changes in April, increasing by one-tenth of a percent in Fort Smith, Little Rock and Memphis and declining by one-tenth in Hot Springs and Pine Bluff.  Since April of 2017 unemployment rates are up slightly in most of Arkansas’ metro areas.

(Annual changes from not-seasonally adjusted data, monthly changes using seasonally adjusted estimates.) Source:  Bureau of Labor Statistics

(*Annual changes using not-seasonally adjusted data, monthly changes using Seasonally Adjusted Metropolitan Area Estimates.)
Source: Bureau of Labor Statistics

Statewide, the unemployment rate was unchanged in April at 3.8%.  Metro area unemployment rates in April ranged from a low of 2.9% in Northwest Arkansas to a high of 5.3% in Pine Bluff.

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

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

 

Payroll Employment
Nonfarm payroll employment was unchanged or declining in April for most of Arkansas metro areas.  The exceptions were the Fayetteville-Springdale-Rogers metro area (+0.2%) and Texarkana (+0.3%).  Over the past 12 months, employment growth has exceeded 2% in both Northwest Arkansas and Northeast Arkansas (Jonesboro).  Memphis, Little Rock and Texarkana are up about 1% over the same period, while Hot Springs, Fort Smith and Pine Bluff have seen zero or negative growth.

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

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

 

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Arkansas Employment and Unemployment – April 2018

By , May 18, 2018 10:51 AM

The latest data on state-level employment and unemployment continue to suggest slowing job growth in Arkansas.

The unemployment rate was unchanged from March at 3.8% — up 0.2 percentage points from a year ago.  In the household survey, the number of employed was down for the seventh consecutive month and the number of employed was up for the fifth month in a row.  The changes are small (and not statistically significant), but they suggest a clear slowdown in labor market growth compared to a year ago.

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 declined by 1,500 March to April (seasonally adjusted).  The number of employed in both the Retail Trade and Leisure & Hospitality sectors was up in April, but the increases were not as large as typically expected for a March-to-April change.  Consequently, on a seasonally-adjusted basis, employment in those two sectors led the list of seasonally-adjusted job losers for the month.  Sectors adding jobs included Professional & Business Services, Other Services, and Manufacturing.  Over the past 12 months, Professional and Business Services and Manufacturing have been leading the way on job growth.  In Manufacturing, the employment gains have come from both durable and nondurable goods sectors.

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

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

As illustrated in the figure below, both sources of employment data for Arkansas are indicating a growth slowdown compared to the trends of 2014-2016.  With unemployment remaining at the historically low rate of 3.8 percent, it is perhaps not surprising that ongoing job growth is experiencing a slowdown.  But while the pace of employment expansion is slowing, there is no indication of a significant contraction.  Rather, it appears that employment in some service-providing sectors is stabilizing after a period of relatively rapid growth.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

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