Institute for Economic Advancement

Category: Metro Areas (MSAs)

Arkansas House Prices – 2017:Q2

By , May 24, 2017 5:40 PM

Arkansas house prices continue to trend upward, but at a slower pace than the national average.  According to the latest Expanded Data indexes from the Federal Housing Finance agency, Arkansas house prices rose 1.2% in the first quarter of 2017.  Over the most recent four quarters, Arkansas house prices were up 4.2%.  Over the same period, the national average for house prices increase by 6.7%

Source: Federal Housing Finance Agency

Source: Federal Housing Finance Agency (FHFA)

The comparatively rapid pace of house prices nationwide reflects a rebound effects in the areas where prices declined the most during the market crash of 2007-11.  As shown in the following figure, that pattern holds true for the metro areas that cover parts of Arkansas.  House prices declined by over 12% in Memphis and by nearly 20% in Fayetteville from 2007 to 2011.  Those two metro areas have also seen the most rapid home-price appreciation since 2012.  Having experienced little depreciation during the period of housing price declines, Jonesboro and Texarkana have seen the highest rates of cumulative price increase since 2007.

Source: Federal Housing Finance Agency (FHFA).  Seasonal Adjustment by the Institute for Economic Advanacement

Source: Federal Housing Finance Agency (FHFA). Seasonal Adjustment by the Institute for Economic Advancement

In the most recent quarter, house prices were up in all of Arkansas’ metro areas except Little Rock, where prices are reported to have fallen by 1.0%.  Prices were down over the quarter in non-metropolitan regions of he state.  Over the past year, prices have risen most rapidly in Fort Smith and Fayetteville, and have risen most slowly in Pine Bluff and Little Rock.

Federal Housing Finance Agency (FHFA). Seasonal Adjustment by the Institute for Economic Advancement

Federal Housing Finance Agency (FHFA). Seasonal Adjustment by the Institute for Economic Advancement

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Metro Area Employment and Unemployment – March 2017

By , May 3, 2017 5:06 PM

New data on unemployment in Arkansas metro areas shows rates generally continuing to trend downward in March.  The exceptions were Pine Bluff and Texarkana, each of which had unemployment rates that were unchanged from February.  Elsewhere in the state, unemployment rates ticked downward by 0.1 or 0.2 percentage points.

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

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

Compared to twelve months earlier, rates are down approximately one-half of a percentage point in most of the state’s metro areas.  Unemployment in Memphis is the same as it was a year ago.  In Texarkana, the unemployment rate was on the decline through early 2016, but has edged up by one-half of a percentage point since March of 2016.  The figure below shows current rates and recent trends for unemployment rates in metro areas around the state.

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

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

Payroll Employment
Statewide nonfarm payroll employment was essentially unchanged in March.  Monthly changes in the state’s metro areas were mixed.  Fort Smith and Jonesboro both saw declines of over 1 percent.  Employment in other metro areas was up slightly.  Over the past year, Pine Bluff, Texarkana and Fort Smith have seen zero or negative employment growth, while the other MSAs have seen employment expand.  The Fayetteville metro area continues to exhibit the strongest growth in the state.

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

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

Over the longer run, employment growth trends have diverged significantly during the current economic expansion.  Fayetteville and Jonesboro have grown steadily since the end of the great recession, but other metro areas have experienced slower growth.  Among the state’s other metro areas, only Little Rock and (as of this month) Memphis have surpassed pre-recession employment levels.

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

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

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Metro Area Employment and Unemployment – February 2017

By , April 5, 2017 4:58 PM

Data on unemployment rates for metropolitan areas are still in flux after recent revisions.  Today’s news release featured new information for February and revised figures for January, but the databases at the Bureau of Labor Statistics have not yet been updated with revised historical data.  We do know that the not-seasonally adjusted data shows unemployment rates lower than a year ago in six of Arkansas’ eight metro areas.  In Memphis and Texarkana unemployment rates are up slightly from February 2016 to February 2017.

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

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

Although the statewide unemployment rate ticked downward in February (to a new record low), seasonally adjusted estimates for Arkansas metro areas indicate slight increases in unemployment from January to February.  The unemployment rate in Memphis dropped by 0.4 percentage point and unemployment in Jonesboro was unchanged, but the other metro areas saw increases.  The seemingly anomalous juxtaposition might just be noise in the data or reflect idiosyncrasies of the seasonal adjustment process — stay tuned for future revisions.

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

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

Payroll Employment
Nonfarm payroll employment was unchanged or higher in all of Arkansas’ metro areas.  The two metro areas that have been growing the fastest during the current economic expansion saw significant gains:  Jonesboro was up 0.9% from January to February and Fayetteville rose 0.8%.  Texarkana, where job growth has been rather weak in recent years, saw a full percentage point increase in employment.

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

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

Only three metro areas — Fayetteville, Jonesboro, and Little Rock — have seen net increases in payroll employment since the pre-recession peak of December 2007.

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Metro Area Employment and Unemployment – January 2017

By , March 20, 2017 4:42 PM

The latest release on metro area unemployment rates included only selected data:  Revisions to historical data and seasonal factors are in progress and will be included in next month’s report.  For now, only the not-seasonally adjusted data are available.  As shown in the following figure, unemployment rates vary considerably across Arkansas metro areas.  Fayetteville, Jonesboro, and Little Rock have unemployment rates below the statewide average of 4.2%, while the remaining metro areas have rates that are above the average.

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

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

From January 2016 to January 2017, unemployment rates declined sharply in most of the state’s metro areas, with the statewide rate declining by one-half of a percentage point.  Two exceptions were Memphis and Texarkana, which experienced increases in unemployment rates over the 12-month period.

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

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

Payroll Employment
Changes in nonfarm payroll employment were mixed across metro areas.  One-month changes ranged from Hot Springs (+1.6%) to Fort Smith (-1.4%).  Compared to January 2016, employment was higher in five of the eight metro areas, but was lower in Fort Smith and Texarkana.

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

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

The latest report included annual benchmark revisions to the payroll employment time series.  The underlying not-seasonally adjusted data were revised back to April of 2015, with seasonal factors revised back five years.  The revisions are summarized in the table below and displayed in the accompanying set of charts.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

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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

 

 

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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.

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Metro Area Employment and Unemployment – August 2016

By , September 30, 2016 3:53 PM

New data on employment and unemployment in metro areas came out earlier this week.  The data continue to show substantially lower unemployment rates in most Arkansas metro areas than a year earlier, although most of the decline took place in the latter part of 2015 with monthly data showing rates leveling off more recently.  In Texarkana, the unemployment rate has been drifting higher in recent months, leaving a net change of zero compared to August 2016.

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

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

From July to August, seasonally adjusted estimates show no change in unemployment rates in most metro areas.  Unemployment rates in Fayetteville and Texarkana crept upward by one-tenth of a percentage point, while Hot Springs saw its unemployment rate decline by one-tenth.  The unemployment rate in Pine Bluff increased by two-tenths of a percent.

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

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

As shown in the figure below, unemployment rates in Arkansas have leveled off since spring, and in some cases have increased through the summer.  Considerable variation remains among metro area rates, with unemployment under 3% in Fayetteville and over 5% in Memphis and Pine Bluff.

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

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

Payroll Employment
Estimates of nonfarm payroll employment in August were mixed.  From July to August, employment declined in Fayetteville and Pine Bluff, while increasing in Fort Smith, Little Rock, and Memphis.  Compared to a year earlier, only Pine Bluff shows a net decline in employment.  Since the employment trough of February 2010, the data show strong job growth in the Northwest and Northeast regions of the state, with more modest growth in other metro areas.  The exception is Pine Bluff, where employment has continued to decline.

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

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

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Metro Area GDP – 2015

By , September 27, 2016 4:55 PM

New data on metropolitan area GDP were published by the Bureau of Economic Analysis last week.  For the metro areas in Arkansas, the news was decidedly mixed.  Only one of Arkansas’ metro areas — Fayetteville-Springdale-Rogers — had GDP growth in excess of the national average for metro areas:  Growth in Northwest Arkansas was reported at 4.4%, compared to 2.5% for the aggregate of all U.S. metro areas.  At 2.4%, Jonesboro’s growth rate was near the national average.  At the other end of the scale, GDP was reported to have contracted in three metro areas, with losses in Hot Springs and Pine Bluff reported at -3.0%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The data for a single year do not always reveal the underlying growth trend.  As shown in the figure below, for example, the contraction in Hot Springs interrupted a series of years with relatively robust growth.  Even after declining 3% in 2015, GDP in Hot Springs was up 12.7% from it’s pre-recession level in 2007.  Over the same period, Fayetteville was the fastest-growing metro, with cumulative growth of 28.5%.  At the other end of the scale, GDP in Pine Bluff was down nearly 14% from its 2007 level.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Another caveat to the interpretation of the latest data:  The figures for 2015 are considered to be “advance estimates,” subject to considerable future revision.  The data release last week included revisions to the data for 2014, which were sizable in some cases.  In fact, for four metro areas (Hot Springs, Little Rock, Memphis, and Texarkana) even the direction of GDP change in 2014 has now been revised.  The update to Texarkana data is particularly large: having been originally estimated at -1.0%, GDP in 2014 is now reported to have increased at a 1.6% rate.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The revisions to 2014 data show that the new data for 2015 should be interpreted with caution.  The multi-year trends in the data are revealing, but the latest reading on annual growth rates may look quite a bit different when the data are revised a year from now.

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Metro Area Employment and Unemployment – June 2016

By , August 3, 2016 4:35 PM

Unemployment rates ticked up in Arkansas metro areas in June, but rates remain far lower than a year ago.  Today’s news release from the Bureau of Labor Statistics noted that unemployment rates were lower than a year earlier in 285 of the nations 387 metropolitan areas, and all 8 metro areas that cover parts of Arkansas were in that total.  Year-over-year changes ranged from -0.7% in Fort Smith and Texarkana to -1.6% in Pine Bluff.

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

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

From May to June, not-seasonally adjusted unemployment rates increased by 0.3 to 0.5 percentage points, but most of those gains were typical seasonal changes.  After seasonal adjustment, unemployment rates increased by only 0.1 percentage point in most metro areas.  Rate increases were larger for Fort Smith and Memphis, and unemployment was unchanged in Texarkana.  As previously reported, the statewide unemployment rate (seasonally adjusted) was unchanged at 3.8% in June, while the national unemployment rate increased by 0.2 percentage points from 4.7% to 4.9%.

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

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

Payroll Employment
Nonfarm payroll employment changes were mixed  From May to June, payrolls declined in Little Rock, Pine Bluff and Fort Smith but were up in the state’s other metro areas.  Employment in Hot Springs was up 0.8%.  From June 2015 to June 2016, employment in three metro areas increased at a higher rate than the statewide average of 1.7%:  Hot Springs increased 3.8%, Fayetteville was up 3.7%, and Jonesboro rose by 3.5%.  Since the employment trough of February 2010, the northwest and northeast corners of the state have seen the strongest job growth (23% in Fayetteville and 16.4% in Pine Bluff).  At the other extreme, employment in Pine Bluff is nearly 10% lower than in February 2010, and is down 12.3% from pre-recession levels.

Source:  Bureau of Labor Statistics, Current Employment Statistics

Source: Bureau of Labor Statistics, Current Employment Statistics

The chart below illustrates the divergent employment trends among the state’s metro areas since the 2008-09 recession.  Fayetteville, Jonesboro and Little Rock are the only three metro areas to have higher employment now than at the end of 2007.

Source:  Bureau of Labor Statistics, Current Employment Statistics

Source: Bureau of Labor Statistics, Current Employment Statistics

 

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Real Personal Income – 2014

By , July 8, 2016 4:22 PM

The Bureau of Economic Analysis released new figures on real personal income for states and metropolitan areas yesterday.  The data contain a wealth of information on incomes, prices and standards-of-living.  They are based on a relatively new dataset calculating “regional price parities,” (RPPs) which measure differences in the prices levels of goods and services across states and metropolitan areas.  Essentially, RPPs serve as a measure of relative price levels among states and metro areas.

The newest data, which apply to 2014, show that the cost of living in Arkansas is the second-lowest in the nation.   The RPP for Arkansas was 87.5, down from 87.7 in 2013.  This number can be interpreted as saying that the cost of living was 12.5% below the national average in 2014.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Because prices in Arkansas are among the lowest in the nation, the purchasing power of incomes in Arkansas is far closer to the national average than nominal (dollar-denominated) incomes would suggest.  In 2014, per capita personal income in Arkansas was only 82% of the national average–ranking the state #43 among the 50 states plus D.C.  After adjusting for differences in the cost of living, however, real per capita income in Arkansas was 93.9% of the national average–implying a ranking of #34.

The slight down-tick in the RPP for Arkansas (from 87.7 in 2013 to 87.5 in 2014) can be interpreted as indicating a lower rate of inflation in Arkansas than the national average.  The U.S. inflation rate in 2014 (as measured by the Personal Consumption Expenditures Price Index) was 1.4%.  The implied regional price deflator for Arkansas increased by only 1.2%.  Hence, the state’s 3.7% growth rate of nominal personal income translates to a real (inflation-adjusted) growth rate of 2.5%.  For the U.S., the nominal growth rate of 4.4% implied a real growth rate of 2.9%.

The composition of Arkansas’ low RPP is typical of other low cost-of-living states:  Prices for goods are near the national average, but the prices of services — especially rents — are far below the norm.  This is not surprising, of course.  Goods can be transported and sold with little marginal expense.  Services are not so transportable.  In fact, in the jargon of international trade, services are often classified as “non-tradables.”  Statewide, the RPP for goods in Arkansas was 95.1%, implying that prices of goods were only 4.9% below the national average.  The RPP for non-rent services was 93.5, while the RPP for rents (which also proxy for home prices) was only 62.5.

As shown in the table below, there is considerable variation among RPPs in Arkansas metropolitan areas.  Overall RPPs range from 91.9 in Memphis to a low of 82.0 in Jonesboro.  The cost of living in Jonesboro–18% below the national average–is the fifth-lowest in the nation.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

While there is variation in RPP price-levels around the state, all RPPs in Arkansas are below 100, implying below-average costs.  This also translates to higher purchasing power.  As shown in the table below, the Fayetteville-Springdale-Rogers metro area is the only part of the state where dollar-incomes are above the national average, with incomes in Pine Bluff at less than two-thirds of the norm.  After RPP adjustment, incomes in all parts of the state (other than Northwest Arkansas) are closer to the national average.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Changes in RPPs for different metro and nonmetro areas around the state also differ, implying variation in inflation rates.  In economic terms, it is the real inflation-adjusted growth rates of income that matters.  The table below shows both nominal and real income growth for the metro and nonmetro areas of Arkansas.  Note that the differences between total income growth and per capita income growth reflects changes in population.  Much of the total income growth in Northwest Arkansas represents population growth that has accompanied general economic expansion.  On the other hand, total real income growth in Pine Bluff was negative, but the losses in income reflected declining population.  In per capita terms, real income in Pine Bluff remained approximately unchanged from the previous year (+0.1%).

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

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