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.

Arkansas Home Sales – December 2015

By , March 10, 2016 3:34 PM

The latest data from the Arkansas Realtors® Association shows a year-end surge in home sales.  Compared to the previous year, home sales were up 19.6% in December.  There is often a year-end uptick in home sales, but the most recent increase was far larger than usual.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

For two reasons, however, this measured increase is probably overstating the trend rate of growth.  First, the previous December was relatively weak, so this December’s growth rate is calculated from a low base.  Second, the timing vagaries of closing dates on real-estate transactions can sometimes result situations where transactions that might have concluded in November were carried over into December — that is, there is often some month-to-month randomness.  The seasonally adjusted data shown below–which strips away some of the predictable seasonal variation — suggest this might have been the case at the end of 2015.   It is November’s relative weakness that stands out as the deviation from the prevailing trend.

ARA_1215_SA

Source: Arkansas Realtors® Association; Seasonal adjustment by the Institute for Economic Advancement.

Another way to look past the monthly variability is to consider quarterly-averages.  Year-over-year growth for the entire fourth quarter of 2015 was up 11.6% from the previous year, up slightly from the 10.2% growth rate of the first three quarters of the year.

Source: Arkansas Realtors® Association; Seasonal adjustment by the Institute for Economic Advancement.

Source: Arkansas Realtors® Association; Seasonal adjustment by the Institute for Economic Advancement.

Total sales for the year topped 30,000 for the first time since 2007, and were 10.6% higher than the total for 2014.  The outlook for 2016 is for continued sales growth, as improving economic conditions and an ongoing environment of relatively low mortgage rates continues (for now).

Revised Unemployment Statistics for 2015

By , February 29, 2016 12:16 PM

Annual revisions to the Local Area Unemployment Statistics (LAUS) have been completed by the Bureau of Labor Statistics.  For Arkansas, the revised data show a lower unemployment rate throughout 2015 than was previously reported.  In particular, the newly revised data eliminate a mysterious surge in the unemployment rate that was originally reported during the late spring months of 2015.  The new numbers show that the Arkansas Unemployment rate stood at 4.7% in December, revised down from 4.8%.

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

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

As shown in the panels below, the revision to the Arkansas unemployment rate is largely attributable to a revised path for the number of unemployed.  The figures also show that the number of employed Arkansans at the beginning of 2015 was revised downward, so that the growth rate of household employment was actually higher than originally reported.

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

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

The newly revised statistics are from the program sometimes referred to as the “household survey.”  Data on nonfarm payroll employment come from an independent survey of employers.  Revisions to the payroll data will be announced on March 14th.   Estimates constructed by the Institute for Economic Advancement suggest that the current level of nonfarm payroll employment for Arkansas will be revised downward by approximately 8 thousand jobs.

FHFA House Prices – 2015:Q4

By , February 25, 2016 4:08 PM

New data from the Federal Housing Finance Agency (FHFA) show continuing appreciation of Arkansas house prices.  As illustrated in the figure below, the FHFA Expanded-Data Index for Arkansas increased in each quarter of 2015.  In the fourth quarter, the index was up 1.1% from the previous quarter, and 3.2% higher than the previous year.  The index for the U.S. — recovering from a significantly sharper decline of 2007-2011 — was up 1.3% for the quarter and 5.6% for the year.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

The expanded data indexes are only available at the state level, but the FHFA publishes All-Transactions indexes that cover metropolitan areas as well.  The table below summarizes recent house-price changes in Arkansas’ eight metro areas.  In the fourth quarter, prices were down in Little Rock, Pine Bluff and Texarkana.  For the year, prices were down only slightly in Texarkana, but were higher in all other metro areas (as well as the non-metropolitan portions of the state).

Source:  Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

House prices in Northwest Arkansas have shown the most rapid appreciation over the past five years, but are recovering from the largest house-price declines in state during the 2007-2011 period.  In fact, the figure below illustrates that most of the state’s metro and non-metro areas suffered only modest declines during the nationwide housing price collapse, and all have shown at least modest appreciation over the most recent two- to five-year period.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

Arkansas Home Sales – November 2015

By , February 4, 2016 4:45 PM

The Arkansas Realtors® Association released their penultimate monthly report for 2015 this morning, showing a total of 2104 homes sold in Arkansas during November.  Home sales typically drop off sharply toward the end of the calendar year, and this year is no exception.  Nevertheless, November’s total was up 4.3% from the previous year.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

December is always a relatively slow month as well, so the cumulative year-to-date totals reported today provide a good indication of how the year will turn out.  For the first 11 months of the year, home sales were up 9.2% compared to the same period in 2014.

As shown in the chart below, seasonally adjusted data reveal that November’s home sales were somewhat below the recent growth trend.  However, a single month slowdown provides little reason to expect that the steady growth we’ve seen over the past 3 years will abate.  In a forecast presented in early November, we anticipated that 2015 sales growth would end up at close to 9%, and projected a year of double-digit growth for 2016.

Source:  Arkansas Realtors® Association; seasonal adjustment by the Institute for Economic Advancement

Source: Arkansas Realtors® Association; seasonal adjustment by the Institute for Economic Advancement

Metro Area Employment and Unemployment – December 2015

By , February 3, 2016 4:17 PM

As previously reported, statewide unemployment declined by two-tenths of a percent in December — a result that is mirrored in new statistics for Arkansas’ metropolitan areas.  As shown in the table below, unemployment rates fell in all eight metro areas that include parts of Arkansas.

Source:  Bureau of Labor Statistics, Local Area Unemployment Statistics

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics

Over the course of the year, unemployment rates around the state have declined significantly.  From December 2014 to December 2015, changes ranged from -0.4% in Fort Smith to one full percentage point in Hot Springs and Jonesboro.  At the end of the year, unemployment rates were at or below 5% in five of the eight metro areas.

Source:   Bureau of Labor Statistics, Local Area Unemployment Statistics

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics

Payroll Employment
Changes in nonfarm payroll employment were mixed.  Employment declined in Jonesboro, Little Rock, and Pine Bluff, but showed strong gains in Fayetteville, Fort Smith, Hot Springs and Memphis.  Compared to a year ago, payroll employment was up in six metro areas, having fallen in Fort Smith and Pine Bluff.  Growth over the past 12 months has been particularly strong in Fayetteville and Jonesboro.

Source:  Bureau of Labor Statistics, Current Employment Statistics

Source: Bureau of Labor Statistics, Current Employment Statistics

As shown in the figure below, strong payroll employment growth in Fayetteville and Jonesboro continues a trend that has characterized the entire economic expansion, with the two northern corners of the state experiencing far more rapid growth than the rest of the region.  At the other extreme, employment in Pine Bluff has continued to decline.  At the end of 2015, Pine Bluff payrolls were down 17.5% from pre-recession levels.

Source:  Bureau of Labor Statistics, Current Employment Statistics

Source: Bureau of Labor Statistics, Current Employment Statistics

Note:  The metro-area payroll data will be subject to the annual benchmark revision process, with revised numbers to be reported in mid-March.  Our estimates of the statewide employment revisions suggest that the updated data will show slower growth among at least some of the state’s metro areas, particularly for the second half of 2014.

Arkansas Employment and Unemployment – December 2015

By , January 26, 2016 11:21 AM

The final pre-revision employment report for 2015 came out this morning, showing the Arkansas unemployment rate falling 2-tenths of a percent to 4.8% in December.   The number of employed rose by nearly 3,700 and the number of unemployed dropped by 2,200.   As a result, the size of the labor force increased by 1,500.  Over the past seven months, the size of the labor force has held fairly steady, with employment expanding by 11,540 and unemployment dropping by 11,230.  Over that time period, the unemployment rate has fallen by one percentage point, from 5.8% in May to 4.8% in December.

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 expanded sharply in December, increasing by 8,900 from November (seasonally adjusted).  The November figure was also revised upward by 1,200 from the previously reported level.

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

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

Employment increases were recorded over a wide range of sectors, with a particularly strong gain in Leisure & Hospitality Services (+3,300).  Manufacturing employment expanded by 1,500, with gains reported in particular in food manufacturing.  Over the past 12 months, payroll employment has expanded by 19,300 — approximately 1.6%.

Today’s report was the final estimate of nonfarm payrolls before the annual benchmark revisions, which will be released on March 14.  Based on the more complete series of employment statistics from the Quarterly Census of Wages and Employment (QCEW) we are estimating that the net revision will show about 8,000 fewer jobs at the end of 2015 than current statistics are reporting.  Much of the downward revision to job growth will affect the latter part of 2014, with revisions to December 2014 employment to be approximately negative 6,000.  From that revised base, the benchmarked data for 2015 should show growth of around 17,000 jobs for 2015 (December over December), a growth rate of approximately 1.4%.

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 Employment and Unemployment – November 2015

By , December 18, 2015 12:52 PM

The unemployment rate in Arkansas declined by one-tenth of a percent to 5.0% in November, matching the national average.  The press release from the Department of Workforce Services pointed out that the last time the Arkansas unemployment rate was this low was in April 2008 (when the U.S. unemployment rate was also 5.0%).

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The household data showed that the number of unemployed declined by 1,968, while the number of employed edged up by 205 (resulting in a labor force decline of 1,763.)  Over the past six months, the number of employed Arkansans has increased by 9,443 while the number of unemployed has declined by 10,301.

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

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

Payroll Survey
In contrast to the recent employment trends from the household survey data, nonfarm payroll employment contracted by 2,200 jobs in November (seasonally adjusted).  The employment total for October was revised upward by 1,100 jobs, however, so the net change from September was a loss of only 1,300 jobs.  Compared to 6 months ago (May), payroll employment has increased by 4,200.  Over the past 12 months, it is up by 14,700.  While the trend in job growth remains positive, there is clearly a loss of momentum in recent months.

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

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

From October to November, both Manufacturing and Construction were down by over 1,000 jobs.  Employment in construction typically declines this time of year, but the fact that the seasonally-adjusted change was negative implies a larger-than-usual decline in jobs.  Similarly, the seasonally-adjusted decline of 1,100 jobs in Retail Trade (along with the year-over-year decline) indicates that holiday hiring has not been as robust as usual or expected.  Sectors that added jobs in November included Professional & Business Services and Education & Health Services.  Those two “super-sectors” alone have increased by nearly 12,000 over the past twelve months, and have expanded by more than 46,000 jobs since the pre-recession date of December 2007.

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 – October 2015

By , December 8, 2015 4:12 PM

The latest data on metro area employment and unemployment was mixed.  In a previous release, the statewide unemployment rate ticked down by one-tenth of a percent in October, but nonfarm payroll employment was basically flat.  Overall, the metro area data show similarly unremarkable changes for October.

Not seasonally adjusted data from the household survey shows that unemployment in all of Arkansas metro areas remains below the levels of a year ago.  The press release from the Bureau of Labor Statistics reported that year-over-year declines were realized in 337 of the nations 387 metropolitan areas.

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

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

Month to month changes are typically influenced at this time of year by seasonal factors, with schools back in session and holiday temporary hiring starting to pick up.   The seasonally adjusted data show, however, there was little change in unemployment rates in Arkansas metro areas after accounting for these recurring seasonal factors.  Rates were unchanged in Fayetteville, Hot Springs, Little Rock and Pine Bluff.  Unemployment ticked up one tenth of a percent in Jonesboro and Texarkana, and down by one tenth in Fort Smith and Memphis.

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

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

Payroll Employment
Changes in nonfarm payroll employment (seasonally adjusted) were mixed.  From September to October, employment was unchanged in Little Rock, up slightly in Fayetteville and Fort Smith, but down in the state’s other metro areas.  Compared to a year ago, employment was down significantly in Pine Bluff, but unchanged or higher in the other seven metro areas.

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

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

Arkansas Taxable Sales – 2015:Q3

By , December 2, 2015 3:39 PM

Final data are now available showing that Arkansas Taxable Sales rose sharply in the third quarter of 2015.  The basic measure of taxable sales — derived from state sales tax collections — increased by 3.0% from the second quarter to the third (seasonally adjusted).  On a year-over-year basis, Arkansas Taxable Sales (ATS) was up 5.6%.

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

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

Falling gasoline prices continue to suppress the growth of total estimated spending on gasoline.  Arkansas gas prices averaged $2.28 in the third quarter, down from $2.40 in the second quarter.  As a result, spending on gasoline declined by 1.1% from the second quarter to the third quarter (seasonally adjusted), and was down by over 25% compared to the third quarter of 2014.   Accordingly, Arkansas Taxable Sales Including Gasoline (ATSIG) rose at a slower pace than ATS.   From the second quarter to the third quarter, ATSIG increased by 2.7%, and was up only 3.3% from the previous year.

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

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

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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 2015:Q3 (Excel file).

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