Institute for Economic Advancement

Arkansas Employment and Unemployment – February 2011

By , March 25, 2011 11:15 AM

Arkansas’ unemployment rate remained unchanged at 7.8% in February (seasonally adjusted).  The latest data from the Bureau of Labor Statistics and Arkansas Department of Workforce Services show that the number of unemployed dropped for a second consecutive month, down by 768.  The survey of households also showed that the number of employed increased by 3821 in February, and was up by nearly 16,000 from a year earlier.

Data from the payroll survey showed similar gains in February, with the number of jobs up by 2,000 for the month.  The gains were exclusively in the service-providing sectors.  Goods producing sectors showed a total decline of 2,900 jobs for the month.   Large increases were recorded for Professional and Business Services (up 2,800) and Trade, Transportation, and Utilities (up 1,600).

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

A similar pattern can be seen in employment growth since February of last year.  Total employment increased by nearly 23,000 jobs.  Employment in the goods-producing sectors declined by about 3,500 jobs, with service-providing sectors adding 26,400 jobs.

Currently-available data suggest that February 2010 marked a low point in the employment series for both the U.S. and Arkansas (see chart below).   The increase in Arkansas employment over the past 12 months represents a recovery of about 39 of the job losses recorded from the start of the recession (December 2007) through February 2010.

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 nonfarm payroll employment, reported in a format compatible with the monthly press release from the Arkansas Department of Workforce Services, are available here
Table – Seasonally Adjusted NFPE

Arkansas Personal Income

By , March 23, 2011 2:04 PM

The latest data on state personal income shows that Arkansas continues to be one of the states recovering most robustly from the recession of 2008-09.  Annual figures from the Bureau of Economic Analysis  show that personal incomes rose 3.5% from 2009 to 2010, placing Arkansas among the top ten fastest growing states for the year.  For the nation as a whole, incomes were up 3.0% for the year.

PI-map2010

The news release from the Bureau of Economic Analysis noted that ten states–including Arkansas–rebounded to income levels higher than their pre-recession peaks.   If we look at the detailed quarterly data, Arkansas reached that point in the first quarter of 2010, and incomes in the state were 4% higher than the previous peak by the fourth quarter of the year.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

As noted in previous posts (here and here), the composition of total personal income is often distorted during recessions.  Government programs to help support incomes of the unemployed and others suffering from economic hardship tend to expand during recessions, both as automatic responses (more households eligible for assistance from existing programs) and with additional support programs (special economic stimulus programs).  Hence, it is often informative to look at income net of current personal transfer payments.

As shown in the chart below, income net of transfer payments has been slower to recover than total income.  Nevertheless, Arkansas has consistently outpaced the national average by this measure as well.  As of the fourth quarter of 2010, income-less-transfers in Arkansas reached the same level as the previous peak in 2008:Q3.  Meanwhile, the national average for this measure of income remains nearly 2% below its previous peak.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The composition of income gains was also encouraging.  In the fourth quarter and for the year as a whole, Arkansas saw increases in wages and salaries; employer-provided benefits; proprietors’ income; and dividends, income & rent.  One category of income that declined in 2010 was unemployment insurance payments.   As the economic expansion matures and unemployment rates subside, we should expect to see unemployment and other transfer income to decline as wages and salaries increase.

Metro Area Employment and Unemployment

By , March 18, 2011 1:00 PM

The latest report on metro area employment and unemployment shows that  job growth is picking up across most of the state, but Fort Smith and Pine Bluff appear to be lagging behind.   This morning’s release from the Bureau of Labor Statistics includes new and revised data that show an improved outlook for central and northwest Arkansas in particular.

From December 2010 to January 2011, payroll employment declined by 0.5% in Fort Smith and by 1.1% in Pine Bluff.  These two metro areas also showed year-over-year declines, and remain at employment levels far below those at the start of the national recession (in December 2007).  The state’s other metro areas have shown varying degrees of progress toward recovering from job losses experienced during the recession.  Jonesboro continues to lead with employment 0.4% higher than in December 2007.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

These new employment figures include the annual “benchmark revisions,” in which past data are updated to incorporate information from more detailed sources.  The revised data show that employment growth during 2010 was stronger than we realized at the time — particularly in the state’s two largest metro areas.  In previously-reported data, both the Fayetteville-Springdale-Rogers MSA and Little Rock-North Little Rock-Conway MSA showed net job losses during 2010.  The revised data show robust growth rates of over 3% in both metro areas.  The revised data shows that much of this job growth ocurred in the first half of 2010, with slower gains during the second half.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The higher employment growth in Little Rock and Fayetteville are consistent with the pattern of unemployment rates across the state.  Fayetteville has the lowest unemployment rate in the state — 6.2% in January (seasonally adjusted).  The unemployment rate in Little Rock has fallen below 7% to approximately 6.8% in January.  Pine Bluff continues to show the highest rate of unemployment, at 9.5%.  Unemployment in the state’s other metro areas range from 7.2% in Texarkana to 8.2% in Fort Smith.  The most recent data show that unemployment rates declined in all of the states MSAs in January, with rates down substantially since late summer and early autumn.

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 MSA Payroll Employment are available from the Bureau of Labor Statistics.  However, data for unemployment rates are not.  In order to facilitate comparisons over different months of the year, unemployment rates are seasonally adjusted by the Institute for Economic Advancement using the conventional Census-X12 ARIMA procedure.

Arkansas Employment and Unemployment – January 2011

By , March 10, 2011 12:39 PM

The latest data on Arkansas employment and unemployment came out this morning.  Today’s release includes new data for January 2011, along with updated and revised data for previous years.

The houshold survey showed a decline in the unemployment rate from 7.9% in December to 7.8% in January.  More important, the components of the overall rate support an optimistic view:  the total number of employed increased by nearly 1,700 and the number of unemployed declined by nearly 300.  The resulting increase in the size of the labor force contributes to an ongoing trend:  since July of last year, the Arkansas labor force has increased by more than 12,000, with the unemployment rate remaining fairly stable.

The unemployment figures released this morning incorporate recent revisions to the statistical methodology used to construct the monthly estimates.  As shown in the figure below, these revisions had the effect of increasing the unemployment rate throughout much of 2009 and 2010.  That is, the unemployment rate over the past two years has been running somewhat higher than the data were leading us to believe at the time.  Most notably, the new data show that unemployment hit 8% for a brief period in early 2010.  Since then, the rate has remained in the 7.8% to 8.0% range.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The payroll survey showed employment gains in most service-providing sectors, but indicated weakness in goods-producing sectors.  Overall, nonfarm payroll employment was up by 1,200 in January (seasonally adjusted).  Compared to January 2010, payrolls were up by approximately 17,000.  The monthly figures showed small declines in both construction (-500) and manufacturing (-700).  Service providing sectors, on the other hand, added 2,200 jobs.  The only non-government service sector to show a monthly decline was Leisure and Hospitality (-1,900).  However, the Leisure and Hospitality sector had been showing strength in the latter part of 2010, with employment up by 4,000 over the past year. 

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The payroll employment data were also subject to annual revisions.   Last year, the revised data revealed a sharply larger rate of job-losses in 2009 than previously-published data had been suggesting.  This year, totals for 2009 and 2010 were not revised substantially, but there were some changes to specific sectors that are notable.   The previously-published data had shown sizable increases in construction and manufacturing employment in 2010.  The revised data show a decline in construction jobs in 2010 and only a small increase in manufacturing employment.  On the other side of the ledger, Trade, Transportation, & Utilities had been showing a net decline for 2010, but the revised data show a fairly strong gain for the year.  The revised data also show larger gains for Professional & Business Services and Leisure & Hospitality Services.  Employment growth in Education & Health Services has evidently been weaker than the original data were suggesting; however, that sector has continued to show positive growth throughout the recession and recovery.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

*A note on seaonally adjusted data:  With holiday shopping and travel subsiding and winter weather moving in, it is typical to see large employment declines in the payroll data for January.  Therefore, it is not surprising that not-seasonally adjusted data for January 2011 show a decline of 19,900 jobs (as reported in the monthly press release from the Arkansas Department of Workforce Services) .  The data presented here at the Arkansas Economist are adjusted by the Bureau of Labor Statistics to account for typical, recurring seasonal patterns.  Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the DWS press release, are available hereTable – Seasonally Adjusted NFPE 

Consumer Confidence in Arkansas

By , March 9, 2011 4:10 PM

A new survey suggests a pessimistic outlook

Earlier this week, Talk Business inagurated a new tool for evaluating consumer sentiment in Arkansas– the Arkansas Consumer Confidence Report sponsored by Delta Trust and Bank.  The report is based on a telephone survey that asks several questions about household economic and financial conditions, as well as perceptions about the economic environment.  This is the first report in what is intended to be a regular quarterly series.

The results of the survey were characterized as expressing caution and concern.  One might also view the findings as indicating downright pessimism.  For instance, in response to the question “do you think that six months from now your personal financial situation will be better off, worse off, or about the same?” only 12% of the survey respondents said “better off,”  while 38% said “worse off.”  

One question that solicited a slightly more positive response was regarding future spending plans.  A plurality of respondents – 41% –  reported that they expected to spend more on goods and services over the next six months, while only 29% said they expected to spend less.  This is good news for the economy if households plan to purchase more goods and services.  However, the phrasing of the question leaves open the possibility that some respondents are simply expressing an expectation of higher prices.

In general, the pessimistic tone of the responses to the survey is at odds with economic data suggesting an improving economy.  The economic recovery has now officially more than 20 months along, with signs of solid growth in measures of income, spending and production.  Employment has been a problematic lagging indicator, but even that measure has been showing some improvement.  As reflected in the survey, however, consumer expectations continue to be mired in a mindset that seems more indicative of ongoing recession.

There was one area of questioning that indicated a correspondence between perceptions and economic data:   In response to a pair of questions about general business conditions, the survey showed significantly more pessimism about the national economy than the state economy.  Slightly over half of the survey respondents characterized Arkansas’ business conditions as “good” or “normal.”  On the other hand, nearly three-quarters considered U.S. business conditions to be “bad.”

Source:  Talk Business, Consumer Confidence Report

Source: Talk Business, Consumer Confidence Report

It will be interesting to see how these survey findings evolve over time.  The new Consumer Confidence Survey promises to be a useful tool for evaluating public perceptions about the state’s economic condition.

The full report, including analysis by Roby Brock of Talk Business and J. French Hill of Delta Trust and Bank, can be found here.  A list of the survey questions and responses can be found here.

FHFA House Prices

By , March 4, 2011 3:01 PM

Recently released data from the Federal Housing Finance Agency (FHFA) shows that house prices in the U.S. continued to decline during 2010, with average house prices down 1.3 percent nationwide.  Here in Arkansas, the decline was somewhat larger — down 2.2 percent.

As shown in the table below, the average price decline for Arkansas is skewed by price changes in the northwest part of the state.  House prices in the Fayetteville-Springdale-Rogers metro area were down 4.1 percent and in Fort Smith prices were down 3.6%.   In the state’s other metro areas, price declines were smaller than the national average.  In Texarkana, house prices were up slightly.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

This is the third year of statewide house price declines.   The FHFA housing price index for Arkansas peaked in the first quarter of 2008.   However, the pattern of price changes has differed from one metro area to another.  From 2000 until the peak, house prices in the Fayetteville area had risen by 51 percent.  Over the past 5 years, however, prices in that region are down nearly 10%.  Prices in Hot Springs continued to rise well after the peak was reached in other markets, but have fallen sharply in the past two years.  In the state’s other metro areas price gains in the first part of the decade were more modest — and recent price declines have been commensurately smaller.  Over the past five years, cumulative price changes have been positive in all the state’s metro areas except Fayetteville.

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