Arkansas Employment and Unemployment – February 2020

By , March 27, 2020 12:06 PM

The Bureau of Labor Statistics has released state-level data on employment and unemployment for the month of February. Arkansas’ unemployment rate remained unchanged for the month at 3.5%, matching the U.S. rate. The number of unemployed was down by 269 and the number of employed was up 1,239. As a result, the labor force expanded by 970.

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

Initial Claims
We don’t normally track weekly initial claims for unemployment insurance, but yesterday’s release for the week ending March 21 was noteworthy. For the U.S., the number of new unemployment claims was 3,283,000, shattering the previous record-high of 695,000 recorded in October 1982. The labor department reported that “nearly every state providing comments cited the COVID-19 virus impacts” to explain the surge. In Arkansas, new claims were up by 8,958, an increase of 548% from the previous week. Most states experienced even larger increases, with the largest percentage gain being 3308% in New Hampshire. The increase in Arkansas was the 40th-largest percentage gain among the 50 states and District of Columbia.

The initial claims data give an indication of what is in store for upcoming unemployment reports. A simple back-of-the-envelope calculation — adding the number of new claims to the number of unemployed in February (and subtracting the same number from the number employed) — suggests a two percentage point increase in the national unemployment rate, from 3.5% to 5.5%. The same calculation for Arkansas suggests a smaller increase, from 3.5% to 4.2%. This is not the way the actual unemployment rate is calculated, but it is indicative of the magnitude and likely impact of the initial claims data that came out this week.

Payroll Employment
Arkansas nonfarm payroll employment declined by 2,900 in February. The number for January — originally reported as an increase of 400 — was revised to show a 400-job decline. February’s job total was slightly lower than the number posted for a year earlier (-700).

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

Employment in most sectors showed small changes, with the exceptions including job losses in Transportation & Utilities (-1,500) and Leisure & Hospitality Services (-2,200). Employment in the Professional & Business Services sector was up by 1,100.

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

The year-over-year decline in employment includes prominent job-losses in Manufacturing (-3,000), Leisure & Hospitality Services (-2,300) and Retail Trade (-1,600). Employment in Government declined by 1,500 compared to year earlier, with the decline entirely attributable to local government employment (in the educational services sub-sector).

Sectors adding jobs over the past 12 months included Education & Health Services (+3,400), Wholesale Trade (+1,700) and Construction (+1,400).

Metro-Area Employment
The annual march-madness of BLS data revisions was reflected in updated payroll data for metropolitan areas last week. The downward revision to the state total as of December (reported previously) was reflected in lower estimates of employment for Northwest Arkansas and Central Arkansas. Data for Jonesboro and Texarkana were revised upward.

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

The data revisions had the effect of lowering two-year growth estimates for most metro areas, with the exceptions again being Jonesboro and Texarkana.

New data for February was also available following this morning’s state employment report. Declines were reported for four of the state’s metro areas, with gains reported for Hot Springs, Memphis and Texarkana. Jonesboro was unchanged. Compared to a year earlier, Fayetteville and Jonesboro top the list for job growth. Year-over-year declines were registered for Fort Smith, Little Rock and Pine Bluff. For Little Rock, the combination of data-revisions and the February decline make for a rather different trajectory for job growth than was indicated in the previously-published data.

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

The figures below illustrate the effects of revisions and newly-released data on recent employment trends in Arkansas’ metro areas.

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

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Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent 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 Personal Income – 2019:Q4

By , March 25, 2020 1:16 PM

The Bureau of Economic Analysis released new state-level personal income data for the final quarter of 2019. Total personal income in Arkansas is estimated to have increased at a 2.7% annual rate, slightly lower than the 3.0% rate for the nation. Arkansas third-quarter growth was also revised from the previously-reported 6.5% down to 3.1%. For the four quarters from 2018:Q4 through 2019:Q4, Arkansas personal income increased 3.4%. Over the same period the nationwide total increased 4.1%.

Source: Bureau of Economic Analysis

Focusing on the fourth quarter, personal income gains were entirely in the nonfarm sectors, with farm income down at a 2.3% annual rate. However, the decline in farm income was tiny compared to the increase at annualized rate of 21,771% that was reported in the third quarter (revised up to nearly 29,000% in yesterday’s report). Annualized quarterly percent changes are not necessarily a revealing way to view a series that has been as volatile as farm income. The third quarter increase reflected increased payments associated with the Department of Agriculture’s Market Facilitation Program. The fourth quarter figures suggest that those payments continued to be relevant. For the year as a whole, Arkansas farm income was down 34% from 2018.

Source: Bureau of Economic Analysis

Earnings were up at a 3.6% rate, for both Arkansas and the U.S, with growth in wages and salaries, supplements, and proprietors’ income supporting that growth. Growth in dividends, interest and rent slowed to 1.1% and transfer receipts increased a rate of 2.09% — both lower than the corresponding national rates.

Source: Bureau of Economic Analysis

Growth in earnings accounted for 2.2% of the 2.7% personal income growth rate. Breaking down the contributions by sector, the largest gains — for both Arkansas and the nation — came from health care sector. Prominent gains in construction and in transportation & warehousing were also relevant. In Arkansas, management of companies and enterprises was also a contributing factor to growth.

Source: Bureau of Economic Analysis

Annual Data
Annual averages show that Arkansas personal income was up 3.9% in 2019, down from the 4.5% growth rate in 2018.

Source: Bureau of Economic Analysis

Nationwide, annual growth averaged 4.4%. Growth rates by state ranged from 6.1% in Colorado to 2.8% in West Virginia. Arkansas’ 3.9% growth rate ranked 32nd among the 50 states.

Source: Bureau of Economic Analysis
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Impact of Covid-19 on the Arkansas Economic Outlook

By , March 23, 2020 2:54 PM

As the impact of the novel coronavirus disease 2019 (COVID-19) works its way through the economy, national economic forecasts are showing an increasingly grim outlook. In addition to disruption of world supply chains, the decline in consumer spending associated with “social distancing” is generating forecasts with significant declines in aggregate demand that make a recession appear inevitable.

On Friday, March 20, IHS Markit released their latest forecast for the U.S. economy, projecting a second-quarter decline in GDP of 12.6% (annual rate), with a rebound not coming until the fourth quarter of the year. The IHS forecast suggests decline in payroll employment of 9.9 million (-5.6%) by the fourth quarter, with the unemployment rate peaking at 8.8%. Personal income and spending are expected to decline in the second and third quarters, with losses totaling 2.4% and 4.2%, respectively.

The IHS Markit Forecast for the U.S. assumed that “recovery from the looming economic contraction begins in August, by which time we expect the rate of new cases of coronavirus disease 2019 (COVID-19) to be dwindling and quarantines, official and self-imposed, to be lifting. It is not until the fourth quarter that a firm rebound takes hold.” Labor markets are expected to take somewhat longer to bounce back.

IHS forecasters have not yet released updated state-level forecasts, but by applying the new assumptions for the national model to the Arkansas model, we can estimate the magnitude of the Covid-19 impact on our state’s economy. To a large extent, the forecast for Arkansas reflects a direct application of changes in national aggregates to state-level variables. However, we’ve taken care to apply forecast adjustments on a disaggregated basis in order to account for unique characteristics of the Arkansas economy. For example, because a relatively large share of Arkansas workforce is engaged in goods-producing employment, some declines in service-sector employment have a smaller impact on total employment in Arkansas than at the national level.

In the following sections, we present post Covid-19 forecasts against a Baseline that represents projections from the IHS Markit model for Arkansas, published March 16, adjusted for benchmark revisions to employment that were subsequently announced by the BLS. The Covid-19 adjustment factors are calculated by comparing the IHS U.S. forecast from March 20 to the previously-published March baseline.

Employment
The impact of “social distancing” on employment is concentrated in service-providing sectors. For example, from the first quarter through the fourth quarter, employment in the Retail Trade sector is expected to decline 16%. Employment in Arts, Entertainment and Recreation is expected to fall 20%. In contrast, jobs in Health Care and Social Assistance are expected to increase by 2%. Overall, the decline in payroll employment is expected to total more than 77,000, a drop of 6.0% .

Sources: IHS Markit, Arkansas Economic Development Institute
Sources: IHS Markit, Arkansas Economic Development Institute

Unemployment
The declines in payroll employment will be mirrored in the household measure of employment, with the number employed falling by more than 83 thousand by the fourth quarter, and with the number unemployed rising by nearly 70 thousand to total 117.5 thousand. With these developments, the unemployment rate is forecast to peak at 8.7%.

Sources: IHS Markit, Arkansas Economic Development Institute

Personal Income
Personal income is forecast to be reduced by job losses and business closings, but declines are expected to be mitigated somewhat by increases in transfer payments. From the first quarter of 2020 through the third quarter, personal income is projected to decline by 2.3% before starting to recover in the fourth quarter.

Sources: IHS Markit, Arkansas Economic Development Institute

Consumption
Social distancing practices are having a direct effect on consumer spending in the first and second quarters of 2020, with lingering effects due to the impact of declining employment and income later in the year and beyond. Total consumer spending is expected to decline by 5.1% in the second quarter of 2020. While spending begins to recover in the second half of the year, total consumer spending is expected to remain far below the baseline forecast through the end of 2021.

Sources: IHS Markit, Arkansas Economic Development Institute

Overall spending is also impacted by recent sharp declines in energy prices, with a 51% decline forecast for spending in that category. Note that spending on Food & Beverages for Off-Premises Consumption is expected to increase 13%, as households substitute food prepared at home for restaurant meals.

Sources: IHS Markit, Arkansas Economic Development Institute

Summary and Outlook
There is a great deal of uncertainty associated with any forecast of the current, unprecedented situation. Risks to the forecast are more likely to be on the down-side: The presumed scenario where economic recovery begins by the end of 2020 might prove to be overly optimistic. The declines in consumer spending and income may reinforce one another to create an even more dramatic downturn.

The outlook will undoubtedly change as the situation develops, particularly when it comes to the impact of fiscal and monetary policy responses. At the present time, however, it appears that a dramatic downturn in economic activity over the remainder of 2020 is unavoidable for the nation and for Arkansas.

A PDF file of this report is available HERE.

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Arkansas Employment and Unemployment – January 2020

By , March 16, 2020 1:03 PM

Arkansas’ unemployment rate was unchanged at 3.5% in January. The number of unemployed declined by 120, while the number employed increased by 2,155. Over the past 12 months, the number of unemployed has fallen by 720 while the number employed has risen by 4,697 (an increase of 0.4%).

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

Payroll Employment
Arkansas nonfarm payroll employment increased by 400 in January (seasonally adjusted). After the annual benchmark revisions to recent data, the January employment level was only 2,900 higher than in January 2019 (an annual growth rate of 0.3%).

Employment in most sectors expanded in January, but the notable exceptions of Manufacturing (-1,200) and Professional & Business Services (-2,400). The monthly press release from the Arkansas Division of Workforce Services reported that the decline in manufacturing was attributable to durable goods manufacturing, “with reported contractions in fabricated metal products and in transportation equipment manufacturing.” Including mark-downs to previously-reported growth in revised data, Manufacturing was down by 2,200 jobs compared to January 2019.

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

Benchmark Revisions
Today’s data release included the annual “benchmark revisions” to the state payroll data. Not seasonally adjusted data beginning with April 2018 and seasonally adjusted data beginning with January 2015 were subject to revision. After revision, total nonfarm payroll employment in December 2019 was 5,900 jobs below the number that was originally reported.

As shown in the figure below, the revised employment data indicate quite a different growth pattern than the previously-reported data. The unrevised figures suggested fairly steady growth over the past two years, with a growth rate of 1.0% in 2018 and 1.4% in 2019 (December-to-December). The revised figures show higher growth for 2018 (1.5%), but considerably slower net growth in 2019. From December 2018 through December 2019, cumulative employment growth was only 0.5%. The revised data suggest that employment declined, on net, from January through September of 2019, then regained those losses only during the final quarter of the year.

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

A breakdown of employment revisions by sector shows that some sectors are estimated to have grown more slowly than earlier reports indicated, while others have expanded more rapidly. For example, over the two-year period from December 2017 through December 2019, employment in Wholesale Trade was originally reported to be 7.3%. After revision, growth of only 4.9% remains. Sectors that are now estimated to have grown more rapidly than previously reported include Transportation and Utilities and Other Services.

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

The figures below illustrate the impact of benchmark revisions on Arkansas employment by sector:

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

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent 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 Unemployment – 2019 (Revised)

By , March 4, 2020 4:27 PM

It’s data-revision season at the Bureau of Labor Statistics. Today we saw the release of revised household employment and unemployment statistics by state. For Arkansas, the changes were fairly minor, with the revised figure for the state’s annual unemployment rate in 2019, 3.5%, unchanged from previously-reported estimates. As shown in the figure below, the revisions had the effect of smoothing some of the monthly ups-and-downs in the data over the past several months. The revised data show the unemployment rate at year-end to be 3.5%, one-tenth below the 3.6% originally reported.

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

One aspect of the revision that is noteworthy: As previously reported, Arkansas’ unemployment rate declined to 3.4% in July and August last year, establishing a new record low for the series. The revised data do not show that slight summer dip, so the officially recorded low for the series is now 3.5%.

Revisions to the underlying components of the unemployment rate indicated modest changes. Originally, the number of unemployed was reported to have expanded to over 50,000 in early 2019, then dropping below 47,000 during the summer months. The revised data show the number of unemployed to be steady throughout the year, moving narrowly within a range of 48,000 to 49,000. Both employment and the labor force were revised higher for the latter part of 2018, lower during mid-2019, and ending the year slightly lower than originally reported.

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

The impact of the revisions on household employment growth is shown in the figure below. Over the full two-year period from December 2017 through December 2019, the state’s employment growth rate was revised down from 0.8% to 0.7%. Growth rates over that time show a somewhat different pattern for pre-revision vs. post-revision data: It was previously reported that employment growth slowed during mid-2018 then ended 2019 with an acceleration. The revised data suggest stronger employment growth during 2018, but with the growth rate sagging to below 0.5% during the latter part of 2019.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
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Metro Area Employment and Unemployment – December 2019

By , February 5, 2020 11:35 AM

Unemployment rates in Arkansas metro areas were little changed in December. The rate declined by one-tenth of a percent in Memphis, to 4.1%, and increased by one-tenth in Pine Bluff, to 5.3%. Compared to a year earlier, the unemployment rate in Texarkana was down 0.9%, with smaller year-over-year declines reported for Jonesboro, Hot Springs and Northwest Arkansas. Memphis and Pine Bluff saw slight increases since December 2018, while Fort Smith and Little Rock saw zero net change over course of the year.

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

Annual averages for metro area unemployment rates will not be published until March 4th, after the annual data revision process is completed. Using preliminary data, the figure below shows un-revised, unofficial averages for the year. For the year, unemployment rates were lower than the statewide average in Fayetteville, Jonesboro and Little Rock, while rates were above-average in Memphis, Pine Bluff and Texarkana. Unemployment rates in Fort Smith and Hot Springs were approximately equal to the statewide average.

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

Payroll Employment
Nonfarm payroll employment increased in five of the state’s metro areas in December, with the largest increase in Northwest Arkansas (0.5%). Memphis and Texarkana saw slight declines for the month, while Jonesboro and Pine Bluff experienced no net change.

Compared to a year earlier, employment was down by 1.8% in Pine Bluff, but was unchanged or higher in Arkansas’ other metro areas. Fayetteville and Jonesboro continued to show the fastest growth, with rates of 4.1% and 2.6%, respectively.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
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Arkansas Employment and Unemployment – December 2019

By , January 24, 2020 11:47 AM

In the final state-level employment report for 2019, data from the Bureau of Labor Statistics showed solid job growth in Arkansas. The unemployment rate remained unchanged at 3.6%, with both the household and payroll employment data indicating strong year-end increases. The unemployment rate in Arkansas has remained below 4% for 3-1/2 years now and shows no indication of moving outside the range of 3 to 4%.

Source: Bureau of Labor Statistics

Household employment was up 2,483 in December and has increased by 4,714 over the past three months. The number of unemployed increased slightly (+214) in December, adding to small increases from the previous three months. Labor force growth has been strong, with nearly 2,700 added to the labor force in December and nearly 6,400 added over the final three months of the year.

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

Payroll Employment
Nonfarm payroll employment surged 5,400 in December, translating to an annualized growth rate of over 5%.  In fact, the news release from the BLS cited Arkansas as one of only three states seeing statistically significant job gains in December. 

Payroll data for November were revised downward by 800, but the year-end employment total was up 18,300 jobs from December of 2018.  In percentage terms that year-over-year change represents a growth rate of 1.4%, roughly matching the U.S. growth rate over the same period.

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

The monthly change in employment was driven primarily by service-sector growth, with Professional & Business Services up 2,800 and Education & Health Services up 2,000. Goods producing sectors showed zero growth, with gains in manufacturing matched by a decline in construction employment.

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

Year-over-year growth job growth was been positive for most sectors. Information Services and Mining & Logging contracted slightly over the course of 2019 and overall government employment was unchanged. Otherwise, job gains emerged in both goods-producing and service-providing sectors. Manufacturing employment was up for the fourth consecutive year. Service sector job growth showed some signs of a slowdown over the summer months but regained momentum toward the end of the year.

Since the current employment-growth trend started (from about December 2013), Arkansas payrolls have expanded by 111,600 jobs, an average annual growth rate of 1.5%.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent 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 GDP – 2019:Q3

By , January 10, 2020 11:56 AM

Arkansas’ Real Gross Domestic Product (GDP) increased an an annualized rate of 2.9% in the third quarter of 2019, surpassing the national growth rate of 2.1% and ranking #5 among state GDP growth rates. The third quarter growth rate represents a sharp increase in GDP growth over the second quarter’s 1.8% rate.

Source: Bureau of Economic Analysis

Smoothing growth rates over a four-quarter moving average, the latest reading puts Arkansas up 1.9% compared to the third quarter of 2018. Over the same period, U.S. GDP expanded by 2.1%.

Source: Bureau of Economic Analysis

The news release from the Bureau of Economic Analysis noted that the leading contributors to GDP growth nationally included nondurable goods manufacturing; retail trade; and professional, scientific, and technical services. As shown in the table below, the first two of these sectors were also significant contributors to Arkansas’ growth rate. In addition, Arkansas GDP was boosted by strong growth in agriculture, forestry, fishing and hunting; as well as management of companies and enterprises. The Agriculture, etc., component itself grew at a rate of 56.2% in the third quarter—the fastest growth rate in the nation for that particular sector.

Source: Bureau of Economic Analysis

Sectors experiencing negative growth in the third quarter included finance and insurance, which the BEA noted as a factor subtracting from growth in all 50 states and the District of Columbia. Other contracting sectors in Arkansas included utilities, and transportation & warehousing.

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Arkansas Employment and Unemployment – November 2019

By , December 20, 2019 10:44 AM

The latest state-level employment report shows the Arkansas unemployment rate ticking up 0.1 percentage point to 3.6% in November. As is often the case, the reported change was as much rounding error as an actual change (calculated with more accuracy, the unemployment rate was up 0.05%). Moreover the change was nowhere close to being statistically significant.

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

The underlying data from the household survey show that the upward pressure on the unemployment rate over the past three months is the result of increases in the estimated number of unemployed, up 1,690 since August. In November, the number of unemployed rose by 764. The number of employed increased in November as well (+1,439), resulting in a sizable uptick in the labor force total (+2,203).

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics

Payroll Employment
The payroll survey showed that nonfarm payroll employment in Arkansas increased by 1,000 jobs in November (seasonally adjusted). Employment in goods-producing industries was down for the month, but both Construction and Manufacturing employment remain well above their levels of a year ago.

Two service-providing supersectors each added 1,000 jobs or more to the total: Professional & Business Services (almost entirely due to an increase in Administrative & Support Services) and Education & Health Services (mostly due to an increase in Health Care & Social Assistance). Other service-providing sectors subtracted 700 jobs from the total monthly change.

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

Over the past 12 months, payroll employment is up by 15,900, approximately 1.3%. Over the same period, U.S. payroll employment rose 1.5%.

The data from the household and payroll surveys are indicating similar growth trends for total employment. From November 2018 through November 2019, the household measure of employment has risen by approximately 14,000, or 1.1%.

Source: Bureau of Labor Statistics

# # #

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

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Arkansas Personal Income – 2019:Q3

By , December 18, 2019 4:41 PM
Arkansas personal income increased at an annual rate of 6.5% in the third quarter of 2019, outpacing the national growth rate of 3.8%.  Arkansas’ growth rate was the 5th-highest in the nation.

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Arkansas rapid growth rate was primarily attributable to a surge in farm income. According to today’s news release from the Bureau of Economic Analysis, “Increases in farm earnings were the leading contributors to income growth in each of the ten fastest growing states, reflecting increases in payments associated with the Department of Agriculture’s Market Facilitation Program in the third quarter.” The annualized growth rate for Arkansas farm income was 21,772%. The farm component of proprietors’ income was similarly enormous, boosting the growth rate of total proprietors’ income to 81.4%. Dividends, interest and rent (property income) declined at both the state and national levels.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas personal income growth for the second quarter was also revised up slightly from 4.0% to 4.3% (annual rate), bringing the cumulative four-quarter growth rate to 5.1%. Over the same period, U.S. personal income rose 4.5%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Total earnings growth for Arkansas was 9.7%, contributing 5.75 percentage points to total personal income growth. Farm income contributed 3.06 percentage points to the total. Among other sectors, large contributors to Arkansas’ earnings growth included Management of Companies and enterprises, and Health care and social assistance.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

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