Institute for Economic Advancement

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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

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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.

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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

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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.

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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

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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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2016 Arkansas Economic Forecast Presentation

By , November 7, 2016 4:31 PM

Dr. Michael Pakko will present his annual forecast for the state’s economy on the morning of Wednesday, November 16 at a Little Rock Regional Economic Briefing, hosted jointly by The Little Rock Branch of the Federal Reserve Bank of St. Louis and the Institute for Economic Advancement at the University of Arkansas at Little Rock

The briefing will include:

  • Kevin Kliesen, St. Louis Fed research officer and business economist, will discuss national conditions.
  • Charles Gascon, St. Louis Fed regional economist, will give an overview of the state of the Arkansas economy.
  • Michael Pakko, chief economist and state economic forecaster with the institute, will provide the Arkansas forecast.
Date:  Wednesday, Nov. 16, 2016
Time:  7:30-8 a.m. | Breakfast
8-9:45 a.m. | Program
Location: Clinton Presidential Center
Great Hall
1200 President Clinton Ave.
Little Rock, Ark. 72201

Registration is free; however, registration is required by Friday November 11.
Register here:  https://www.stlouisfed.org/events/2016/11/LRK-REB1116

Little Rock Regional Economic Briefing

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Metro Area Employment and Unemployment – September 2016

By , November 2, 2016 3:40 PM

Unemployment rates increased in all of Arkansas’ metropolitan areas in September.  Seasonally adjusted estimates showed increases of 0.2 percentage points in six of Arkansas’ metro areas, with the rate increasing by 0.3 in Pine Bluff and only 0.1 in Texarkana.  The statewide unemployment rate rose by 0.1 percentage points for the month.

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

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

Unemployment rates remain consistently lower than a year ago, but have given up some of the gains achieved during the summer and are presently at levels comparable to the early months of 2016.

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

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

Payroll Employment
Changes in Nonfarm Payroll Employment in September were mixed.  Hot Springs and Jonesboro both showed solid employment gains for the month.  However, employment was down in Fayetteville, Little Rock, Memphis and Pine Bluff.  Employment was essentially unchanged in Fort Smith and Texarkana.

Source: Bureau of Labor Statistics, Current Employment Statistics

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

Over the past 12 months, employment has increased across most of the state, but has declined in Pine Bluff and Texarkana.  Employment has been slow to recover from the 2008-09 recession in many parts of Arkansas.  Only Fayetteville and Jonesboro have shown significant employment increases since December 2007, with the Little Rock metro area up slightly compared to pre-recession levels.  Employment in Pine Bluff is down by 13% from 2007, having fallen 10.5% since employment in other parts of the state reached post-recession lows.

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

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

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Arkansas Employment and Unemployment – September 2016

By , October 21, 2016 4:43 PM

The September report on state-level employment and unemployment showed that the Arkansas unemployment rate increased by 0.1 percentage points to 4.0%.  The national unemployment rate was 5.0% in September, also up 0.1 percentage points.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The September report on household employment and unemployment represented a continuation of the trends that emerged over the summer. The number of unemployed Arkansans was up 1,513 and the number of employed was down by 541.  September was the fourth consecutive month in which unemployment increased and employment declined.

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 3,300 in September (seasonally adjusted*).   Employment in Education & Health Services accounted for much of the gain, increasing by 2,300 jobs.   Manufacturing employment registered an increase of 1,200, but was still down by 300 jobs compared to a year ago.  In fact, employment has declined over the past 12 months in each of the major goods-producing sectors (Mining & Logging, Construction, and Manufacturing), while increasing in every service-providing super-sector.

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

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

Relative to pre-recession levels, total payroll employment in Arkansas has increased by 25,200 — a gain of about 2.1%.  Over the same period, nationwide employment has increased by 4.6%.   Payroll employment expanded by more than 2% in both 2014 and 2015, but has slowed in 2016:  From December 2015 through September 2016, Arkansas employment is up by only 5,800, or 0.5%.

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

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

 # # #

*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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Arkansas Employment and Unemployment – August 2016

By , September 20, 2016 12:59 PM

The Arkansas unemployment rate was unchanged at 3.9% in August.  The number of unemployed was up slightly (+267) and the number of employed was down (-1,520); however, these changes were not enough to cause the unemployment rate to budge more than a tiny fraction of a percentage point. August was the third consecutive month in which employment and unemployment moved in the “wrong” direction.  If these three month trends continue, the unemployment rate will tick up to 4.0% in September.  Despite the recent slowdown in household employment, Arkansas has shown significant improvement over the past 12 months.  The decline of 1.2% in the state’s unemployment rate since August 2015 is the largest decline in the country, matched only by Tennessee.

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

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

Payroll Employment
Arkansas nonfarm payrolls increased by 3,400 in August (seasonally adjusted). Employment in goods producing sectors was down, while most service-providing sectors expanded.   Particularly strong gains for the month were seen in Wholesale and Retail Trade, as well as Leisure and Hospitality Services.

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

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

Over the past year, employment is up by 16,700 jobs.  However, the pace of growth has slowed considerably since a year ago. From December 2014 through December 2015, Arkansas payroll employment expanded by 27,100 jobs — a growth rate of 2.3%.  So far in 2016, cumulative employment growth has totaled only 2,400 jobs, representing an annualized growth rate of only 0.3%.

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

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

# # #

*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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