Institute for Economic Advancement

Arkansas Employment and Unemployment – January 2017

By , March 13, 2017 6:05 PM

Today’s state employment report featured a new record low unemployment rate for Arkansas, 3.8%.  Previously published figures had shown a 3.8% unemployment rate back in May of 2016, but recent data revisions eliminated that transitory dip in the data.  With the latest downtick, Arkansas’ unemployment rate in January was a full percentage point lower than the national average.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Underlying the unemployment rate itself, the number of unemployed dropped by 2,098 in January, while the number of employed increased by 823.  On net, therefore, the labor force contracted by 1,275 for the month.

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

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

Payroll Data
Nonfarm payroll employment declined by 4,300 in January.  In a reversal of typical patterns, goods-producing sectors added jobs in January, while service-providing sectors shed jobs during the month.  Construction and Manufacturing showed increases of 300 and 700 workers, respectively.  Meanwhile, employment in service-providing sectors was down by 5,300.  The declines were broadly based, with sectors losing jobs including Wholesale Trade, Transportation and Utilities, Information Services, Professional and Business Services, and Leisure and Hospitality.

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

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

Compared to a year ago, total employment is up by 11,300.  After data revisions (see below), growth in Manufacturing employment is looking more healthy, up by 2,300 over the past 12 months.  The bulk of job growth is taking place in key service sectors, Education and Health Services up 6,800, Professional and business services up 300, and Other Services up 2,100.

Revisions to Payroll Data
Today’s report included the annual benchmark revisions to the payroll data.  Data from the Quarterly Census of Employment and Wages (QCEW), which is more complete and accurate than the monthly payroll employment statistics, had led us to expect a modest downward revision to total employment levels for the state.  However, the revised data revealed a small upward adjustment, amounting to about 800 jobs.  After revision, total payroll employment shows a growth rate of 1.2% from December 2015 through December 2016 (up from an original estimate of 0.4%).  Growth for the previous year was revised downward slightly from 2.3% to 2.0%.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Revisions to the not-seasonally adjusted data covered the period March 2015 through December 2016.  Although there are small changes in the data for previous periods, these are only minor adjustments to seasonal factors.  Hence, the economically significant revisions are limited to the last two years.  The table below summarizes the impact of the revisions by sector, reporting on the change in the level of employment by sector as of December 2016, and comparing the pre-revision to post-revision growth rates for the two-year period December 2014 to December 2016.

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 hereTable-Seasonally Adjusted NFPE.

 

Revised Unemployment Rates for Arkansas

By , February 28, 2017 4:24 PM

The Bureau of Labor Statistics has completed its annual review and revision of Local Area Unemployment Statistics (LAUS) for 2012-2016.   The data revisions incorporate updated population controls from the U.S. Census Bureau, revisions from other original data sources, and model re-estimation.

For Arkansas, the revisions were not surprising.   The originally published data showed a sharp increase in household employment over the first three months of 2016 — a reading about which we were very skeptical from the outset.   After revision, the unprecedented surge in employment and labor force was eliminated completely.  The new data show more robust growth in employment over most of 2015 and a much smaller upswing/downswing during 2016.  The new data also show that the number of unemployed was lower than previously reported for much of 2015, with a smaller decline in the number of unemployed during the first part of 2016.

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

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

As a result of the revisions, Arkansas’ unemployment rate now shows a more rapid decline during 2015, followed by a more stable rate during 2016.  The original data had indicated that the Arkansas unemployment rate declined to as low as 3.8% in May 2016, drifting back up to 4.0% toward the end of the year.  After revision, the unemployment rate changed little over the year, starting at 4.1% then dropping to 4.0% for most of the rest of the year.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Today’s data revisions also included the official annual averages for unemployment.  The report noted at least three distinctions for Arkansas:

1.  From 2015 to 2016 (annual averages), the Arkansas unemployment rate declined 1.1%, from 5.1% to 4.0%.  Massachusetts and South Carolina were the only states to show a larger decline (-1.2%).

2.  For the year, Arkansas unemployment rate of 4.0% can be considered statistically significantly lower than the U.S. average of 4.9%.

3.  Arkansas was one of only 14 states to show a statistically significant increase in the employment-population ratio (up 0.7 percentage points, from 55.1% to 55.8%)

 

Arkansas Taxable Sales – 2016

By , February 13, 2017 4:25 PM

Arkansas Taxable Sales (ATS) increased 0.4% in the fourth quarter of 2016 (seasonally adjusted), and were up 1.8% from a year earlier.

With gasoline prices little changed, an increase in gallons sold pushed gasoline expenditures up 9.9% for the quarter.  As a result, Arkansas Taxable Sales Including Gasoline (ATSIG) rose 0.9%.  Compared to the fourth quarter of 2015, ATSIG was up 2.2%.

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

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

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

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

Both ATS and ATSIG had declined over the first half of 2016, but recovered lost ground in the third and fourth quarters.  On average, 2016 was a year of slowing growth in taxable sales.  Not including gasoline, Arkansas Taxable Sales were up 1.5% for the year.  With gasoline prices down from $2.18 in 2015 to $1.91 in 2016, expenditures on gasoline were down 8.2%.  Consequently, ATSIG rose only 1.0% for the year.

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

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

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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 monthly and quarterly data is available here: Arkansas Taxable Sales 2016:Q4 (Excel file).

Arkansas Home Sales – December 2016

By , February 7, 2017 1:48 PM

The Arkansas Realtors® Association has released home sales information for December 2016, completing the data for calendar year 2016.  Sales for the month totaled 2,731, up 8.3% from the previous December.  Total sales for the year were 34,033, up 8.1% from 2015.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The rising trend in home sales has now run more than four full years.  As shown in the chart below, quarterly seasonally-adjusted data display robust growth since at least the beginning of 2013.  Seasonally adjusted sales in the fourth quarter of 2016 were 8,870, breaking through the pre-recession sales level of approximately 8,500/quarter.

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

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

Last November, our forecast for home sales in 2016 was 33,600, so the final figures for the year slightly outpaced expectations.  Sales in 2017 are expected to continue their robust growth, with our forecast calling for over 36,000 home sales and a year-over-year growth rate of 8.4%.  This outlook is conditioned on a continued slow pace of rising interest rates.  If the Federal Reserve raises rates more aggressively than presently expected, a slowdown in home sales might take hold before the end of 2017.

Arkansas GDP – 2016:Q3

By , February 2, 2017 3:35 PM

The Bureau of Economic Analysis announced this morning that Arkansas real GDP grew at a 2.3% annual rate in the third quarter of 2016.  While this growth rate is roughly in line with prevailing trends, Arkansas’ growth lagged behind the nationwide rate of 3.5%, ranking #41 among the 50 states.

GDP-map-2016Q3

Over the past four quarters, Arkansas’ growth rate has averaged 2.1%, compared to 1.6% for the entire U.S.

Source: U.S. Bureau of Economic Analysis

Source: U.S. Bureau of Economic Analysis

As shown in the table below, the patterns of growth rates across sectors are quite similar for Arkansas and the U.S.  Growth was relatively strong in Utilities, Finance and Insurance, and Administrative services.  Another sector to show encouraging growth was Durable Goods Manufacturing.  Arkansas’ agricultural output contracted in the third quarter; however, agricultural output shows substantial volatility from quarter to quarter.  Output in the mining sector was down across the board, reflecting continued weakness in oil and gas prices.

Source:  U.S. Bureau of Economic Analysis

Source: U.S. Bureau of Economic Analysis

Metro Area Employment and Unemployment – December 2016

By , February 1, 2017 3:47 PM

Unemployment rates in Arkansas metro areas were generally lower in December than in November.  Although the raw not-seasonally adjusted figures show increases in all eight metro areas that include parts of Arkansas, the end of year is typically associated with seasonal upticks in unemployment associated with academic breaks.  After seasonal adjustment, unemployment rates declined Fayetteville, Fort Smith, Jonesboro and Pine Bluff.  Seasonally adjusted unemployment rates were unchanged in Hot Springs and Little Rock, while increasing slightly in Memphis and Texarkana.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Compared to year earlier, Decembers metro unemployment rates continued to show significant declines.  From December 2015 through December 2016, unemployment rates declined by 0.1% (Texarkana) to 1.2% (Pine Bluff).

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm Payroll Employment in December was up 0.7% in Jonesboro and 0.4% in Fort Smith, but was lower in 5 of the state’s metro areas.  Compared to December 2015 employment was higher in most metro areas, with particularly large gains in Jonesboro.  Tow metro areas, Pine Bluff and Texarkana showed year-over-year declines in employment.  Those two metro areas also showed longer-term declines, with employment lower than the post-recession trough point of February 2010.  Five of the state’s eight metro areas have yet to reach pre-recession (December 2007) employment levels.  Eight years after the onset of the 2008-09 recession, only Little Rock, Fayetteville and Jonesboro have shown net gains.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

 

 

Arkansas Employment and Unemployment – December 2016

By , January 24, 2017 12:46 PM

As reported last Friday by the Arkansas Department of Workforce Services, Arkansas’ unemployment rate declined one-tenth of a percentage point to 3.9% in December.  This morning, the U.S. Bureau of Labor Statistics released additional details.  From the household survey data, the number of unemployed Arkansans declined by 1,345.  However, the number of employed declined by 5,357, the 7th consecutive monthly decline in employment.  It was also the 7th consecutive decline in the size of the active labor force (-6,702).

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 increased by 1,700 in December (seasonally adjusted).  Sectors showing monthly increases included Leisure and Hospitality services (+1,200), Wholesale Trade (+1,100) and Education and Health Services (+1,200).  Both Construction and Manufacturing showed losses for the month, and remain below the levels of December 2015.

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

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

Overall, the current data indicate that payroll employment rose 5,200 from December 2015 through December 2016, a gain of only 0.4%.  The 2016 year-over-year gain compares to an increase of 27,100 (2.3%) in 2015.  However, these totals will be revised in the next report from the BLS, scheduled to be released on March 13th.

Using available data from the Quarterly Census of Employment and Wages (QCEW), we anticipate that the payroll employment totals will be revised downward for the period from September 2015 forward.  These estimates suggest that the employment increase in 2015 will be revised downward to show a gain of only 16,000 jobs (1.3%), while the change from December 2015 through December 2016 will end up indicating an increase of 6,800 jobs (0.6%).

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

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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.

Arkansas Home Sales – November 2016

By , January 18, 2017 4:19 PM

The Arkansas Realtors® Association announced this morning that home sales in November 2016 were up 24.4% compared to November 2015.  As shown in the figure below, home sales typically slow during the final three months of the year, with November often showing a sharp drop-off compared to October.  In 2016, the October-November decline was only 5.9%, compared to an average of over 20% in the previous three years.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

After seasonal adjustment, the November sales total represented one of the strongest months of the year:  The seasonally-adjusted monthly total of 2890 homes translated to an annual sales pace of nearly 35,000.  More importantly, the November statistic is in line with an ongoing growth trend that has prevailed for nearly four years now.  With only one month left to be reported in the calendar year, the year-to-date figures show an increase of 9.9% compared to the same period in 2015.

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 Personal Income – 2016:Q3

By , December 20, 2016 3:43 PM

Personal income increased by 0.9% in Arkansas in the third quarter, a slightly smaller increase than the nationwide gain of 1.1%.  Percentage changes among the 50 states fell within a relatively narrow range, from +0.4% in Oklahoma to +1.4% in South Dakota.  Arkansas’ growth rate ranked #41.  Over the most recent four quarters, Arkansas personal income increased by 3.3%, compared to a 3.5% increase for the U.S.  Over the course of the current economic expansion (from 2010:Q1), Arkansas income growth has averaged 4.2% while the U.S. average has been 4.3%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Net earnings rose 1.1% in Arkansas and 1.3% for the U.S.  This morning’s report from the Bureau of Economic Analysis noted that earnings “was the leading contributor to growth in personal income in most states.”  Income from dividends, interest, and rent was also an important contributor for Arkansas, as has been the case throughout the current expansion.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Earnings by sector:  Earnings growth in the third quarter was strongest in service-providing sectors, although growth was spread fairly evenly across sectors.  The categories of Farm income, Mining, and Forestry were the only sectors with negative income growth.  Income in the construction sector showed an encouraging 1.1% rate of increase in Arkansas.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

On a per capita basis, Arkansas personal income increased 0.8% in the third quarter, a slightly smaller increase than the U.S. average of 0.9%.  At $39,602, per capita personal income was 79.7% of the U.S. average ($49,681), down one-tenth of a percentage point from the 79.8% reading in the second quarter.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas Employment and Unemployment – November 2016

By , December 16, 2016 12:19 PM

Arkansas unemployment rate remained unchanged at 4.0% in November.  The nationwide unemployment rate fell by 0.3 percentage points to 4.6%, narrowing the gap between the U.S. and Arkansas unemployment rates.  Nevertheless, the news release from the Bureau of Labor Statistics noted that Arkansas remains one of 16 states where the unemployment rate is significantly lower (in a statistical sense) than the national average.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

For the sixth consecutive month, the labor force data show a decline in the number of employed Arkansans (-3,929), reinforcing the evidence from the payroll survey that employment growth has slowed during the year (see below).   On the other hand, the number of unemployed was also down in November (-1,130), following a revised decline (-277) in the previous month.  As a result of the lower numbers for both employment and unemployment, the labor force was down sharply in November (-5,059).

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

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

Payroll Data
Nonfarm payroll employment declined by 2,000 in November (seasonally adjusted).  The sector experiencing the largest decline was Retail Trade, down 3,400 from the previous month and down 2,400 from November of 2015.  Seasonal factors are likely at play here:  With internet sales comprising a larger proportion of holiday shopping, the seasonal increase in retail hiring has been slower than in previous years, resulting in a seasonally-adjusted decline and a year-over-year decline.

Professional and Business Services continues to be the strongest performing sector, both nationally and here in Arkansas.  Meanwhile, employment in the Education and Health Services sectors has recently shown signs of slowing.  Over time, these two service-providing sectors (Professional and Business, Education and Health) continue to be the engines of growth in the state’s employment.  Each has contributed 5,800 new jobs over the past 12 months, with all other sectors collectively showing a net decline of 2,800 jobs.

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

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

Projected Data Revisions
The BLS recently released second quarter data from the Quarterly Census of Employment and Wages, which provides a more accurate assessment of payroll employment than the Current Employment Statistics.  Based on this new information, our projection for upcoming revisions of Arkansas payroll employment data has been revised further downward.  As of today’s report, we now expect the downward revision to total about 9,500 jobs.  The data revisions primarily affect the first half of 2016, so after expected revisions we now expect that the November 2015 to November 2016 change in employment will total only 5,800 after revision, compared to 8,800 in the currently reported statistics.  (The revised data will not be officially available until March 2017).

Sources: Bureau of Labor Statistics (CES, QCEW) and calculations by the Institute for Economic Advancement

Sources: Bureau of Labor Statistics (CES, QCEW) and calculations by the Institute for Economic Advancement

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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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