Institute for Economic Advancement

Arkansas Employment and Unemployment – April 2016

By , May 20, 2016 3:24 PM

The April employment report for Arkansas represented another in a string of positive reports in 2016, particularly for the data from the household survey.  The unemployment rate declined by two-tenths of a percentage point, from 4.1% in March (revised) to 3.9%. The monthly gain in employment was 5,309 — down from the ebullient 10,000+ pace of the previous three months but still substantial.  The number of unemployed Arkansans declined by 2,449.

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

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

Arkansas was mentioned several times in the news release from the Bureau of Labor Statistics.  The 3.9% unemployment rate was hailed as setting “a new series low” (dating back to 1976), and Arkansas was touted as experiencing the largest year-over-year unemployment rate decline in the nation (tied with Tennessee at -1.6%).  The unemployment rate in Arkansas is now more than a full percentage point lower than the national average of 5.0%.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The sharp decline in the unemployment rate and the underlying surge in household employment are almost too good to be true.  In just four months, the household survey data have shown a cumulative employment increase of over 35,000 and a drop in the unemployment rate of 0.8%.  In contrast, data from the payroll survey have shown a decline of 1,900 jobs over the same period.  Eventually, data revisions might help reconcile these conflicting signals.  But for now, it’s probably a good idea to take the household employment report with a grain of salt.

Payroll Survey
Nonfarm payroll employment increased by a mere 700 jobs from March to April.  Compared to April of 2015, payrolls were up by over 25,000, but most of that growth took place during the latter part of 2015.  Employment is now 17,500 jobs (1.4%) higher than it was before the onset of the “great recession.”

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

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

Sectoral changes in payroll employment were mixed.  Gains were recorded in the goods-producing sectors of Construction and Manufacturing.  Wholesale and Retail Trade sectors also experienced growth, as did Professional and Business Services.  Other service-providing sectors were flat or declining.  The not-seasonally adjusted data showed an increase in Leisure and Hospitality services; however, after taking account of normal seasonal variation, employment in that sector down from the previous month.

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

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 compatible with the monthly news release from the Arkansas Department of Workforce Services, can be found hereTable-Seasonally Adjusted NFPE.

Metro Area Employment and Unemployment – March 2016

By , April 29, 2016 5:05 PM

Earlier this week, the Bureau of Labor Statistics released new statistics on metro area employment and unemployment in March.  Also included in this week’s data dump were the long-awaited annual revisions to household employment and unemployment for metro areas.

The new statistics for March showed that the long decline in unemployment rates has continued, and even accelerated in some metro areas.   The not-seasonally adjusted data showed that unemployment rates have fallen significantly over the past 12 months, with changes ranging from -0.8% in Texarkana to -1.9% in Pine Bluff.

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

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

From February to March, unemployment rates continued their downward march in every Arkansas metro area except for Pine Bluff, where the rate stalled at 5.6%.

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

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

The unemployment rate changes thus far in 2016 come on top of downward revisions to the data for 2015.  As shown in the figures below, the revisions to data for 2014 and 2015 generally evened-out some of the volatility, with the revised data showing smoother, more monotonic downward paths.

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

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

In some cases, there were noticeable changes in the estimated unemployment rate levels (e.g. Pine Bluff and Memphis).  The table below summarizes the impact of the revisions on annual average unemployment rates.  With the exception of Memphis, revised unemployment levels were subject to small revisions in 2014, but the revisions had the effect of lowering the 2015 average unemployment rates for all eight metro areas.

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

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

Underlying the changes in unemployment rates, data on employment and unemployment were also revised.  The chart below shows the impact of the revisions on overall employment levels (as measured in the household survey data).  As of December 2015, the revisions increased measured employment in four metro areas and decreased it in the other four.  The largest revisions to the employment data were for Pine Bluff (+5.5%) and Hot Springs (-3.4%).

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

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

Payroll Data
Data from the independent establishment survey showed weaker employment growth than the household survey.  From February to March, payroll employment declined in 6 of 8 metro areas, rising only in Hot Springs and Jonesboro.  Compared to a year ago, employment has declined in Pine Bluff, but is higher in all other metro areas.  Fayetteville and Jonesboro have displayed the highest growth rates over the past year.

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

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

Arkansas Home Sales – March 2016

By , April 28, 2016 10:55 AM

The Arkansas Realtors® Association announced this morning that home sales in March totaled 2,770 — an increase of 9.7% from March of 2015.  The latest figures extend a string of year-over-year increases that has now lasted 19 consecutive months.  The average growth rate over those 19 months has been 10.2%.  As shown in the figure below, March sales are typically part of the upswing from a slow winter season to a strong summer.  This years total for March, however, is close to peak summer month sales in 2013 and 2014.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The longer-run upward trend in home sales is highlighted in the following figure, which shows seasonally adjusted sales by quarter.  The trends suggest that home sales in 2016 are likely to be close to the robust pre-recession pace.  In fact, if we extrapolate the first quarter’s seasonally adjusted sales pace through the remainder of 2016 (no further growth other than seasonal variation), home sales for the year would be around 32,640 — close to the record-high 33,896 reported in 2006.  If trend growth continues, the annual total could be even higher.

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

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

Arkansas Employment and Unemployment – March 2016

By , April 15, 2016 3:14 PM

The Arkansas unemployment rate was reported to have declined again in March, this time by two-tenths of a percent to 4.0%.  Over the past three months, the rate has fallen by 0.7%.  More remarkable is the underlying data on household employment that has driven the rate decline.  In March, the number of employed Arkansans was reported to have been up 9,569 — the third month in a row of gains near or above 10,000.  From December through March, household employment has increased by more than 30,000.  This is literally unprecedented, and as reported below, it is at odds with the data reported in the separate payroll employment report.

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

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

Payroll Employment
Nonfarm payrolls were down in March, dropping by 3,900 (seasonally adjusted).  In addition, the data for the previous month were revised slightly downward.  From December through March, payroll employment has declined by a total of 3,100.  It is not unusual for the household data and payroll data to give conflicting signals.  The two sets of employment measures are constructed using different data sources and methods.  The household report includes workers in the farming sector, the self-employed, and workers with jobs outside of Arkansas, whereas the payroll data do not.  The payroll data also count each job, whereas the household survey treats multiple job-holders as a single worker.  None of these differences is likely to account for the type of discrepancy we’ve seen between the two sets of employment numbers so far in 2016.

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

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

Two more likely explanations exist to explain the differences in the two employment series.  One possibility is that the unusually mild winter has had distorting effects on the seasonal patterns in the data.  If this is the case, underlying trends in employment growth are likely to become more apparent as the year proceeds.  The other possibility is that unusual patterns are affecting the viability of the model-based components of the data estimation process.  If this is the case, the divergence may persist in the currently published data until they have been revised with more complete information.

For now, taking the data at face value, the table below shows the breakdown of payroll employment changes for March.  For the month, job losses were evident in the goods-producing sectors and in each component of Trade, Transportation and Utilities.  Professional & Business Services and Education & Health Services continued the positive growth that has characterized those sectors throughout the current economic expansion.

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

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 compatible with the monthly news release from the Arkansas Department of Workforce Services, can be found hereTable-Seasonally Adjusted NFPE.

Metro Area Unemployment and Employment – February 2016

By , April 7, 2016 4:55 PM

New data on unemployment rates in  metro areas came out yesterday.  However, the full time series for employment, unemployment and labor force participation are still not available following the most recent data revision.  Consequently, the only information to report at this time is the not-seasonally adjusted unemployment rates for February.  As shown in the table, unemployment rates have fallen substantially over the most recent 12 months in all eight of the metro areas covering portions of Arkansas.  Declines range from one full percentage point in Texarkana to 1.7% in Memphis.  The BLS News Release noted that Memphis was tied for the largest unemployment rate decline among the 51 metro areas in the country with a population of 1 million or more.

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

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

Payroll Employment:
As previously reported, statewide nonfarm payroll employment rose sharply in February, increasing by 6,100 jobs (0.5%).  Over half of that net job gain took place in Northwest Arkansas:  Employment in the Fayetteville-Springdale-Rogers metro area rose by 3,100 for the month — 1.3%.  Gains were also reported in Jonesboro, Little Rock, and Pine Bluff.  Employment was down for the month in Fort Smith, Memphis, and Texarkana.*  On a year over year basis, employment is up in all metro areas except Pine Bluff.

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

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

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Note:  Seasonally adjusted payroll employment data for Texarkana remain temporarily unavailable from the BLS.  The data in this report were seasonally adjusted in-house at the Institute for Economic Advancement.

Arkansas Employment and Unemployment – February 2016

By , March 25, 2016 11:41 AM

The employment and unemployment report for February was unambiguously positive.  For the second month, the unemployment rate declined by more than one-tenth of a percent:  Following a 0.3% decline in January, the rate dropped another 0.2% in February, to 4.2%.  A one-half percent decline in unemployment in Arkansas is literally unprecedented (at least going back as far as 1976).

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The February decline in the unemployment rate was underpinned by a significant increase in the number of employed Arkansans (+10,702) and a decline in the number of unemployed (-2,342).   The first two months of 2016 have seen some remarkable changes in these statistics, but even over a longer period, the trends are clearly positive.  Over the most recent six months, the household survey has shown employment gains averaging over 5,000 per month, and average declines in the number of unemployed by over 1,700 per month.  It is quite likely that some of the recent statistics will ultimately be revised to smooth out some of the unusually large changes, but the data clearly show encouraging trends.

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

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

Payroll Employment
The report on nonfarm payroll employment was similarly upbeat.  Total payroll employment rose by 6,100 in February (seasonally adjusted).  Moreover, the data from January were revised upward by approximately 1,000 jobs.  The recent payroll data have shown more volatility than the household employment statistics, but still indicate positive trends.  Over the past six months, payroll employment gains have averaged approximately 2,700 per month.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The table below shows that February’s employment gains were broad based.  Sizable gains were recorded for Leisure & Hospitality Services, Transportation & Utilities, and Retail Trade.  Construction employment also showed a strong increase.  Combined with a monthly rises in Manufacturing employment, goods-producing sectors contributed positively to the month’s employment increase.

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

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

Compared to February of 2015, payroll employment has increased by 27,900 jobs–a 2.3% rate of expansion.  The only sectors to have lost jobs over that period are Mining & Logging (which has been affected by a slowdown in energy-producing activities) and Manufacturing (which has been subject to a long-term downward trend).  Employment in service sectors and in Retail Trade have accounted for the bulk of employment growth over the past year — and over the course of the entire economic expansion for that matter.  With the recent increases, statewide employment is now 21,400 higher than it was before the recession hit in 2008.

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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.

Personal Income – 2015:Q4

By , March 24, 2016 12:52 PM

New data on state personal income shows that incomes in Arkansas grew by 0.5% in the fourth quarter of 2015, compared to an increase of 0.8% for the U.S.   From the fourth quarter of 2014 through the fourth quarter of 2015, personal incomes rose by 3.4% in Arkansas and by 4.0% nationwide.  Inflation, as measured by the price index for personal consumption expenditures, rose by 0.5% over the year, so real (inflation-adjusted) incomes rose by 2.9% in Arkansas and 3.5% nationwide.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

On an annual average basis, personal income rose by 3.9% in Arkansas, somewhat lower than the nationwide growth rate of 4.4%.  Arkansas’ growth rate ranked number 26 among the 50 states.

Total earnings by place of work, which excludes Dividends, Interest & Rent; and Personal Current Transfer Receipts, expanded by 3.2% in Arkansas and 4.2% for the U.S.  The table below breaks down the growth rates of earnings by industry.  Farm incomes were down in Arkansas, but declined by much less than the national average. Earnings in the mining sector were down all around the nation, reflecting low oil prices.  Earnings in durable goods manufacturing were also down slightly in Arkansas, in contrast to a 2.0% nationwide growth rate.  Areas of strength–particularly in Arkansas–included Forestry, Fishing, and Related Activities; Accommodation and Food Services; and Construction.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas’ per capita income in 2015 was $39,107, representing about 82% of the U.S. average of $47,669.  Arkansas ranked 41st among the 50 states in per capita personal income.  As shown in the figure below, per capita income in Arkansas was less than 80% of the U.S. average during the early stages of the economic recovery, rose to 82% during 2011 and 2012, and has remained at approximately that relative level since then.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

Arkansas Home Sales – January 2016

By , March 23, 2016 3:52 PM

The Arkansas Realtors® Association this morning announced monthly sales figures for January 2016.  January is typically the lowest sales month of the year, so the monthly total will ultimately account for a relatively small share of total sales for the year.  Nevertheless, as shown in the figure below, January sales are often a harbinger of how the year will turn out.  In 2016, January sales of 1,831 were 9.1% higher than a year earlier. It was the highest January sales total since 2007.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The relatively mild winter we experienced in Arkansas may have contributed to unusually strong January sales.  Seasonal factors aside, however, the January sales figure is consistent with the trend of increasing home sales that has prevailed since at least the beginning of 2013 (see figure below).  Even if seasonally adjusted monthly sales figures leveled-off at the January pace for the remainder of 2016, total sales for the year would exceed 2015 by approximately 4%.

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

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

Among the largest counties in the state, sales were consistently robust.  The only county in the top five to experience a decline in sales from January 2015 to January 2016 was Washington County.  Yet that small decline (-3.8%) was measured from a unusually strong 2015 base.  In 2015, home sales in Washington county were up nearly 30% from the previous year, so the cumulative increase from January 2014 to January 2016 was 24.5%.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Metro Area Employment & Unemployment – January 2016

By , March 18, 2016 5:04 PM

New data on employment and unemployment in metropolitan areas were released this morning by the Bureau of Labor Statistics.  The BLS report noted that unemployment rates were “lower in January than a year earlier in 333 of the 387 metropolitan areas.”  All of the metro areas covering parts of Arkansas fell into this category.  As shown in the table below, metro unemployment rates have declined dramatically over the past 12 months, with changes ranging from -1.1 percentage points in Fort Smith to -2.3 percentage points in Pine Bluff.  Significant differences in unemployment rates around the state remain:  The unemployment rate in Northwest Arkansas stood at 3.3% in January (not seasonally adjusted) while the rate for Pine bluff was 6.4%.

Source:  Bureau of Labor Statistics.

Source: Bureau of Labor Statistics.

Data from the household survey–including unemployment rates–were revised since the release of the December data.  However, the revised estimates have not yet been loaded into the BLS time series database, nor have revised seasonally adjusted estimates yet been reported.  Consequently, further detailed examination of the paths of unemployment in Arkansas metro areas will await the availability of the revised data, scheduled to be available on April 15th.

Payroll Employment
Nonfarm payroll employment dropped statewide in January, with the decline reflected in the metropolitan area data for Fayetteville, Hot Springs, Memphis and Pine Bluff.  Jonesboro and Texarkana saw employment gains for the month, while Little Rock and Fort Smith were essentially unchanged.  Compared to a year ago, employment was up in most areas of the state, with the exception of a small decline registered for Pine Bluff (which is also the only metro area in the state with net employment losses since the employment trough of February 2010).  After revisions (see below), only three metro areas presently display higher levels of employment than before the 2008-09 recession.

Source:  Bureau of Labor Statistics.

Source: Bureau of Labor Statistics.

The payroll data have been revised as part of the annual benchmark processing to reflect 2015 employment counts from the Quarterly Census of Employment and Wages.  Not seasonally adjusted figures were revised back to April 2014, and seasonally adjusted numbers were revised back to January 2011.  As summarized in the table below, and illustrated with the subsequent panel of charts, the revisions were in some cases quite substantial.

The revisions were generally positive, with the notable exceptions of Jonesboro and Hot Springs.  Previously reported data had shown Jonesboro to be the fastest-growing metro area in the state, expanding by 7.5% during 2014 and 2015.  That growth rate was marked down by nearly two percentage points.  Meanwhile a sharp upward revision to the data for Northwest Arkansas put the Fayetteville-Springdale-Rogers metro area into the top growth rate position (11.1%).  The other downward revision affected Hot Springs:  A 2.3% downward revision to the estimated level of employment in Hot Springs lowered reported growth from 3.7% to 1.6% for the 2014-15 period.

Source:   Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The largest positive revision was reflected in a 6.3% increase in estimated employment in Pine Bluff.  Previously reported data had indicated a 6.8% contraction in employment — primarily over the first half of 2015.  The revised data suggest that employment in Pine Bluff has stabilized over the past two years.

A similar, albeit smaller, positive revision for Fort Smith changed estimated employment growth from negative to positive.  Previously published data for Texarkana* had indicated sluggish growth but the new data indicate a robust pace of employment expansion.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

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Note:  Seasonally adjusted payroll employment data for Texarkana remain temporarily unavailable from the BLS.  The data in this report were seasonally adjusted in-house at the Institute for Economic Advancement.

Arkansas Employment and Unemployment – January 2016

By , March 14, 2016 4:08 PM

The Arkansas unemployment rate dropped three-tenths of one percent in January to 4.4%.  The decline reflected an increase in the number of employed Arkansans of more than 10,000 and a decline in the number of unemployed by nearly 4,000.  Both the 0.3% decline in the unemployment rate and the 10,000 increase in household employment are not unprecedented, but are unusually large.  We should bear in mind that there is always a margin of error in reported statistics — particularly the initial releases — and month-to-month changes are not necessarily indicative of significant underlying developments.  Nevertheless, the unemployment rate decline and the changes in household employment and unemployment are positive indicators.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
In contrast to the large gain in employment from the household survey, nonfarm payroll employment declined by 5,100 in January (seasonally adjusted).  However, the decline followed a December increase of 6,800 (revised), so the net change from November to January was +1,700.  This type of monthly reversal suggests a likelihood that unusual seasonal influences are relevant.  It is normal for employment to rise in December and then drop off sharply in January.  (In fact, the not-seasonally adjusted payroll employment numbers show a decline of 24,500 in January.)  The temporary spike in the seasonally adjusted figures for December-January suggest that seasonal employment increased more than usual in 2015, with the drop-off in January reflecting a return to more normal conditions.

As shown in the table below, the January drop in employment was attributable to declines in several sectors, including Construction, Transportation & Utilities,  Professional & Business Services, and Other Services.  Compared to January of 2015, only two sectors have shown net declines:  Mining and Logging (which has been adversely affected by low energy prices) and Manufacturing.

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

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

Annual Revisions
With this data release, the BLS released the results of the annual benchmark revisions to the payroll data.  As expected, the revised data show downward revisions to the data for late 2014 and the first part of 2015, with a cumulative adjustment of -8,700 jobs through April 2015.  However, revisions to data from the later part of 2015 reversed those downward adjustments.  By December, the revised data show a net upward revision of +3,100 jobs.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

We will report details of the payroll employment revisions by sector and for metropolitan areas in subsequent posts on the Arkansas Economist.

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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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