Institute for Economic Advancement

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

# # #

*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

# # #

*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 GDP – 2016:Q2

By , December 7, 2016 4:51 PM

The Bureau of Economic Analysis announced this morning that Arkansas’ Gross Domestic Product (GDP) increased at a seasonally adjusted annual rate of 1.6% in the second quarter of 2016, following a revised growth rate of 4.4% in the first quarter.  Arkansas growth for the quarter exceeded the national average of 1.2%.  Compared to a year earlier, state GDP was up 2.4%.

Source: Bureau of Economic Analysis, Gross Domestic Product by State

Source: Bureau of Economic Analysis, Gross Domestic Product by State

As was the case in the first quarter, Arkansas’ growth rate was boosted by a substantial increase in the category of Agriculture, forestry, fishing and hunting.  Other sectors showing strong growth included Transportation and warehousing, Management of companies and enterprises, and Utilities.  Reflecting continued weakness in natural gas prices, output in the mining sector was once again down sharply.  Other sectors contracting in the second quarter included Construction; Educational services; and Arts, entertainment, and recreation.

Source: Bureau of Economic Analysis, Gross Domestic Product by State

Source: Bureau of Economic Analysis, Gross Domestic Product by State

Today’s news release also included revisions to previously published data.  The revised figures show slower growth in Arkansas over the past two years.  On a fourth-quarter over fourth-quarter basis, Arkansas GDP growth was revised from 2.5% to 2.3% for 2014, and revised from 1.4% to 0.0% for 2015.

Source: Bureau of Economic Analysis, Quarterly GDP by State

Source: Bureau of Economic Analysis,Gross Domestic Product by State

Over the seven year period from the trough of the recession (2009:Q2) through the second quarter of 2016, Arkansas GDP growth has averaged 1.9%.

Metro Area Employment and Unemployment – October 2016

By , December 1, 2016 12:05 PM

Differences in unemployment rates among Arkansas’ metropolitan areas generally narrowed slightly in October.  In the areas with the unemployment rates below the statewide average of 4.0% (Fayetteville, Jonesboro, and Little Rock), rates were unchanged.  Unemployment rates were down 0.3 percentage points in Pine Bluff and Fort Smith, and down 0.2 percentage points in Texarkana.  In Hot Springs, where the unemployment rate remains slightly above the statewide average, the unemployment rate ticked down by 0.1.  Memphis was the exception to the pattern, where a 0.1 percentage point increase in unemployment increased the rate to the highest among all metro areas that include parts of Arkansas.

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

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

Unemployment rates remained lower than a year earlier in all eight of the metro areas.  The largest decline was in Pine Bluff — down 1.6 percentage points (not seasonally adjusted data).  The unemployment rate in Texarkana rose 0.5 percentage points since May, but was 0.1 percentage point lower than in October 2015.

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

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

Payroll Employment
Data on nonfarm payroll employment was mixed.  Employment was higher in Memphis, Fort Smith and Little Rock, but declined in Jonesboro, Hot Springs and Pine Bluff.  There was no change in Fayetteville and Texarkana.

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

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

Over the most recent 12 months, employment has increase in all metro areas except Pine Bluff and Texarkana.  Those are also the only two metro areas where employment has declined, on net, since the nationwide and statewide employment trough-date of February 2010.

Arkansas Taxable Sales – 2016:Q3

By , November 22, 2016 11:13 AM

After declining during the first half of the year, Arkansas Taxable Sales (ATS) rose 2.2% in the third quarter of 2016.  On a year-over-year basis, taxable sales were up 1.3% from the third quarter of 2015.  Gasoline sales also rose in the third quarter (+1.6%), despite a slight reduction in the average price of gasoline in Arkansas.  As a result, Arkansas Taxable Sales Including Gasoline (ATSIG) also rose by 2.2% from the second quarter to the third.  Over the past four quarters, ATSIG has increased by 0.6% while gasoline prices have fallen from $2.28/gallon in 2015:Q3 to $1.985 in the most recent quarter.

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

From the trough of the recession (2009:Q2) through the third quarter of 2016, ATS has grown at an average rate of 3.0%.  With gasoline expenditures falling at a 2.1% annual rate over the same period, ATSIG has increased at a 2.8% rate.  As measured by the price index for personal consumption expenditures, inflation has averaged 1.5% over the 7-year expansion, so that real (inflation adjusted) measures of ATS and ATSIG have grown at rates of 1.5% and 1.3%, respectively.

As shown in the final figure below, gasoline prices are at about the same level as at the trough of the recession–around $2/gallon.  However, spending on gasoline as a percent of total taxable sales has fallen to less than 5%, down from around 6% in 2009.  Although expenditures on gasoline have increased over the past 7 years, lower gas prices have allowed for spending on non-fuel items to increase as a share of total expenditures.

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

# # #

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:Q1 (Excel file).

Arkansas Employment and Unemployment – October 2016

By , November 18, 2016 1:50 PM

Arkansas’ unemployment rate remained unchanged at 4.0% in October.   The underlying data from the household survey shows that the number of employed Arkansans declined for the 5th consecutive month, falling by 1,805.  The number of unemployed fell slightly (-368) after rising in the previous four months.

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

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

Payroll Employment
Arkansas nonfarm payroll employment increased by 300 in October (seasonally adjusted).  An increase of 1,700 jobs in Construction employment accounted for a net increase in goods-producing sectors.  Despite a strong increase in Professional and Business Services (+1,700), service-providing sectors contracted from September to Octobers, led by declines in Leisure and Hospitality (-700), Wholesale Trade (-500) and Retail Trade (-1,600).  The concentration of job losses in consumer-related sectors suggests that firms are not scaling up holiday employment as much as in previous years.

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

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

As presented during our Arkansas Economic Forecast Presentation, information from the Quarterly Census of Employment and Wages suggests that the nonfarm payroll data will ultimately be revised downward for the period from 2014:Q2 through 2015:Q1.  Final revisions will not be completed until March 2017 and will include additional data from 2015.   Currently, the total magnitude of the revision is estimated to be approximately 4,800 jobs (about 0.4%), with the revisions concentrated in the second half of 2015.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics and the Institute for Economic Advancement

The table below breaks down the expected revisions by sector.  Employment in goods producing sectors is expected to be revised upward, while service-sector job growth will generally be revised lower (with the exception of Financial Services).  Overall job growth for the period December 2014 through October 2016 is presently estimated to be 31,200 (2.6%), but our projections of future data revisions indicate that growth rate for that period will total 26,400 jobs (2.2%).

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics and the Institute for Economic Advancement

Arkansas Economic Forecast Presentation

By , November 16, 2016 2:06 PM

Little Rock Regional Economic Briefing

Thank you to all who attended this morning’s Regional Economic Briefing, where I presented my annual forecast for the Arkansas economy.  Special thanks to the Little Rock Branch of the Federal Reserve Bank of St. Louis for co-sponsoring the event.

Below are links to the presentations:

Kevin Kliesen:  National Economic Conditions

Charles Gascon:   Startups, STEM Jobs and the Tech Sector

Michael Pakko:  The Arkansas Economic Outlook

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