Arkansas Economic Development Institute

Metro Area Employment and Unemployment – July 2011

By , August 31, 2011 12:17 PM

As previously reported, the statewide unemployment rate rose slightly in July, from 8.1% to 8.2% (seasonally adjusted).  New data released this morning shows that most of Arkansas’ Metropolitan Statistical Areas (MSAs) experienced stable or lower unemployment rates.  As shown in the table below, not-seasonally-adjusted unemployment rates declined in all of the state’s MSAs except for Texarkana.  Unemployment tends to be higher during the summer months, reflecting the impact of summer vacation for school employees and students.  There is typically a very slight drop in unemployment rates between June and July.   After accounting for these seasonal regularities, seasonally adjusted figures show unemployment rates declining in Hot Springs, Jonesboro, Little Rock, Memphis, and Pine Bluff.   Texarkana saw a small uptick in unemployment, while rates in Fayetteville and Fort Smith were unchanged.

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

The Bureau of Labor Statistics reported that unemployment rates in July were lower than a year earlier in 257 of the nation’s 372 MSAs, higher in 94, and unchanged in 21.  Here in Arkansas, only Hot Springs shows a lower unemployment rate than in July 2010.

The figures for nonfarm payroll employment in Arkansas’ MSAs show mixed results for July:  Compared to the previous month, employment declined in Fayetteville, Fort Smith and Texarkana.   Increases were recorded for Pine Bluff, Memphis, and Hot Springs.   The payroll data for Hot Springs have been particularly volatile in recent months, but as of the most recent observation, Hot Springs employment is 7.3% higher than a year ago, 7.8% higher than the employment trough of February 2010, and 2.6% higher than at the start of the 2008-09 recession.  Jonesboro also shows gains over all of those time-horizons, with employment up 1.0% since the start of the recession.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

July Home Sales

By , August 30, 2011 11:40 AM

The Arkansas Realtors® Association reported this morning that Arkansas home sales in July were 20% higher than a year earlier (see the full report here).  Taken in isolation, this statistic suggests considerable improvement in the Arkansas real estate market.  However, a broader look at home sales over the past several months shows that the July data confirm a trend of rather weak home sales during 2011.

As shown in the figure below, home sales tend to reach a seasonal peak during the summer months of June, July and August.  In 2010, however, sales spiked in April due to the expiration of the Federal home-buyers’ tax credit program.  Sales dropped sharply in the following months, with July 2010 showing a sales pace considerably lower than the summer months of previous years.  Sales in July 2011 were clearly higher than they were last summer, but were well-below the level that one would expect during the busy summer months.

Source:   Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The weakness in home sales during 2011 is illustrated more clearly in the following figure, which shows seasonally adjusted sales data.  After adjusting for the typical pattern of low sales during the winter months and high sales during the summer, the non-seasonal cyclical pattern is more apparent.  So for in 2011, seasonally-adjusted home sales are above the post-tax-credit lull last year, but are not much higher than the during the recessionary period in 2008. 

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement.

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement.

Today’s report from the ARA included cumulative sales statistics that  reinforce the weakness of 2011 sales:  For the year-to-date (January-July), sales in 2011 are down 7.7% from the same period in 2010.  Thus far, the statistics suggest that sales for the year are likely to be lower than in any of the previous five years.  

Nevertheless, there is still the possibility of a recovery in coming months.  The home buyers’ tax credit programs sapped some of the strength from 2011 sales by shifting demand forward into 2010.  It is likely that at least some of that demand shift is continuing to depress the pace of current sales.  The more time passes, the more the lagged effects of tax credit programs will wane, revealing the true underlying condition of the Arkansas real estate market.

Arkansas Home Prices Continue to Decline … On Average

By , August 24, 2011 3:22 PM

New data from the Federal Housing Finance Agency (FHFA) show that house prices in Arkansas continued to decline in the second quarter of 2011.   The FHFA All-Transaction Index for Arkansas declined slightly (-0.2%) from the first quarter, leaving the index down 2.5% from the second quarter of 2010.  The rate of decline in Arkansas home prices remains below the national average:  the national statistics show prices down 1.9% in the second quarter and 4.5% lower than a year earlier.

Home price declines are far from uniform across the state.  As shown in the chart below, prices in the Fayetteville metro area have followed a pattern similar to the national average, while prices in Little Rock have only recently shown modest declines.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

In fact, house prices in some of the state’s smaller metro areas have fared even better than in the Little Rock area.  In the second quarter of 2011, prices rose in Hot Springs, Pine Bluff and Texarkana.  In each of these metro areas, prices are higher than they were a year earlier.  In Texarkana, house prices are higher than they were in the last quarter of the recession (2009Q2),  although prices in each of the other metro areas have fallen since then.  If we consider changes over the past five years, home prices in the Fayetteville and Memphis areas are down sharply, but homes in the state’s other metro areas have maintained their longer-run values.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

Arkansas Employment and Unemployment – July 2011

By , August 19, 2011 10:38 AM

The unemployment rate in Arkansas rose again in July, reaching a new cyclical high of 8.2% (up from 8.1% in June).  The latest data from the Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) indicated that the number of Arkansans unemployed rose for the third straight month, up 1,400 in July following a cumulative increase of 3,600 in May and June.  The household survey also showed a decline in the number of those employed, down 7,400. 

The employment data from the household survey have been showing a downward trend since March, falling by a total of nearly 25,000.  However, the establishment survey (which is based on reports from employers) shows a slowdown, but with net positive growth since the beginning of the year.  As illustrated in the figure below, employment measured by the payroll survey has been growing–albeit irregularly–since February 2010.  But since March, net growth in payroll employment has been virtually zero (-0.02%).

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The payroll data for July shows a slight uptick in employment, rising by 600 jobs from the revised level in June (seasonally adjusted).  As shown in the table below, employment declines were registered in some key sectors for the Arkansas economy, including Manufacturing; Trade, Transportation, & Utilities; and Professional & Business Services.  Employment in Leisure & Hospitality Services and Education & Health Services expanded.  In a surprising break from its sluggish recent trend, construction employment rose sharply in July.   Looking at job growth since then end of 2010, only one sector (Manufacturing) has shown negative net growth.  Led by gains in the service providing sectors, total payroll employment has increased by 7,100 jobs during 2011. 

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The seasonally adjusted data from the BLS summarized in the table above is quite a bit different than the not seasonally adjusted data in the press release from DWS.  Before seasonally adjustment, the Arkansas payroll employment was down by 15,600 jobs.  Most of this decline was registered in the category of Local Government (-13,200), reflecting the seasonal decline in employment in the state’s public schools.  The not-seasonally-adjusted data also show a larger decline in Professional & Business Services.

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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 hereTable – Seasonally Adjusted NFPE

Arkansas Taxable Sales – 2011:Q2 (Preliminary*)

By , August 16, 2011 8:10 AM

Arkansas Taxable Sales decline — and this time high gas prices can’t be blamed

Arkansas Taxable Sales (ATS) registered another slow quarter in 2011:Q2, with the basic series (based on state sales tax data) showing a decline of 0.5% from the previous quarter (seasonally adjusted).  Following weak growth in the previous three quarters, the quarterly drop leaves ATS only 0.1% above the level of a year earlier.

Source: Institute for Economic Advancement (based on data from the Arkansas Department of Finance and Administration and the Oil Price Information Service)

Source: Institute for Economic Advancement (based on data from the Arkansas Department of Finance and Administration and the Oil Price Information Service)

In the first quarter of the year, sharp increases in gasoline prices appeared to be a contributing factor to slow ATS growth of 0.4% (revised).  A measure of taxable sales that includes gasoline expenditures — Arkansas Taxable Sales Including Gasoline (ATSIG) — rose 1.6% from the previous quarter, suggesting that spending on gasoline was sapping some of the purchasing power that would otherwise have been reflected in the sales tax figures.  But the second quarter data show a decline in this broader measure as well (-0.4%). 

Although Arkansas gasoline prices declined during the latter part of the quarter, falling from $3.74 in May to $3.50 in June, prices were higher on a quarterly average basis — $3.63 in the second quarter compared to $3.16 in the first quarter.  However, slow gasoline sales volumes kept ATSIG from growing much faster than the ATS measure without gasoline expenditures.  Relative to a  year earlier, ATSIG was up only 2.1% in the second quarter. 

Source: Institute for Economic Advancement (based on data from the Arkansas Department of Finance and Administration and the Oil Price Information Service)

Source: Institute for Economic Advancement (based on data from the Arkansas Department of Finance and Administration and the Oil Price Information Service)

Nationwide retail sales growth slowed in the second quarter (from 2.5% in 2011:Q1 to 1.2% in 2011:Q2), but not as dramatically as the slowdown in Arkansas Taxable Sales.  As shown in the figure below, ATSIG had been showing growth commensurate with U.S. Retail Sales during the early stages of the economic recovery.  The data for 2011 indicate a troubling slowdown compared to the national statistics.

Sources: Institute for Economic Advancement, U.S. Census Bureau

Sources: Institute for Economic Advancement, U.S. Census Bureau

Recent reports on employment and unemployment in Arkansas have suggested economic weakness in the second quarter, and the statistics on Arkansas Taxable Sales provide corroborating evidence.  Forthcoming data releases for the second quarter should help to clarify the situation (e.g., Personal Income data for 2011:Q2 will come out next month).  Looking forward, recent declines in gasoline prices might relieve some of the strain on household budgets and contribute to a rebound in the second half of 2011.  Stay tuned.

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Arkansas Taxable Sales (ATS) is calculated by the Institute for Economic Advancement to serve as a timely measure of 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 data is available here:  Arkansas Taxable Sales Data 2011:Q2 (Excel file)

* Data are preliminary until the release of the DFA report, Arkansas Fiscal Notes for July 2011, and will be updated when information becomes available.

Arkansas Home Sales – 2011:Q2

By , August 11, 2011 8:59 AM

The National Association of Realtors® (NAR) released statistics on home sales by state yesterday.  The seasonally-adjusted data for Arkansas show second quarter sales unchanged from the first quarter and down 17.6%% from the second quarter of 2010.  Nationwide, home sales were down 5.4% from the quarter and down 12.7% from the previous year.  The year-ago comparisons are not surprising:  the second round of home-buyer tax credits expired in 2010:Q2, generating a surge in sales. 

The NAR data are consistent with previously released reports from the Arkansas Realtors® Association (ARA).  The ARA data have shown home sales rising through the first half of the year, but this is a typical seasonal pattern.  As shown in the chart below, seasonally adjusted data reveal fairly stagnant home sales — well below the level of the previous year.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancment

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancment

In fact, the NAR data and the ARA data — while based on different samples and methodologies — are showing a very similar pattern when placed on a comparable basis.  In the chart below, the ARA data is averaged by quarter and both series are indexed to equal 100 in the first quarter of 2009.  Prominent peaks in 2009:Q4 and 2010:Q2 mark the surges associated with tax-credit dates.  Both sets of data show a sharp drop-off in 2010:Q3, and slow sales since then.

Sources:  National Association of Realtors®, Arkansas Realtors® Association, Institute for Economic Advancement

Sources: National Association of Realtors®, Arkansas Realtors® Association, Institute for Economic Advancement

A Note on Per Capita Income in Arkansas MSAs

By , August 10, 2011 12:18 PM

Yesterday’s personal income report for metropolitan areas did not include the usual calculations for per capita income.  Although population figures from the 2010 Census are available for metropolitan statistical areas, the statistics for 2009 have not yet been reconciled with the new Census data (the available 2009 numbers are extrapolated from the 2000 Census).

Although we cannot yet make comparisons over time, it is possible to calculate levels of per capita income using the 2010 data.  The calculations are shown in the table below: 

Sources:  Census Bureau, Bureau of Economic Analysis

Sources: Census Bureau, Bureau of Economic Analysis

 The highest per capita income levels are in the Little Rock MSA (1.9% below the national average) and the lowest are in Pine Bluff (23.3% below the national average).  Note that the national per capita income level used in the table ($39,901) is for all of the United States, not just the metropolitan portion of the country.  Per capita income for the metro areas of the U.S. is somewhat higher:  $42,254.

Updated Aug 10, 2001 @ 4:16 PM — Corrected figures for U.S. per capita income.

Metro Area Personal Income – 2010

By , August 9, 2011 10:26 AM

This morning, the Bureau of Economic Analysis (BEA) released statistics on 2010 personal income for the nation’s metropolitan areas.    The BEA reported that “Personal income rose in 2010 in all but four of the nation’s 366 metropolitan statistical areas (MSAs).”  This represents a vast improvement over 2009, when revised figures show that personal income increased in only 131 of the 366 metro areas.  As shown in the map below, many of the fastest-growing MSAs were scattered across the southern U.S.  The top quintile includes the Arkansas MSAs of Fayetteville-Rogers-Springdale and Jonesboro.  Three other MSAs–Fort Smith, Pine Bluff, and Texarkana were in the next highest quintile. 

MSA_PI2010_map

As shown in the table below, personal income growth exceeded the national average for metro areas in all but two of Arkansas’ MSAs.  In Hot Springs, a growth rate of 2.8% nearly matched the national growth rate of 2.9%, while growth in the Little Rock-N. Little Rock-Conway MSA was only 1.4%.  The national rankings diplay in interesting pattern: the slower-growing MSAs in Arkansas for 2010 were among the best performers in the recession year of 2009.  When taken as a two year average, growth rates for all of Arkansas’ MSAs — except Memphis — were at or above the median for the U.S.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The 2009 growth rates reported in the table have been revised since their initial release last year.  The growth rate for Fort Smith (-1.5%) is unchanged from the preliminary figures, but all other growth rates were revised upward.  In fact, the preliminary figures had shown negative growth rates for Hot Springs, Jonesboro and Texarkana, while the revised statistics show positive growth.

The breakdown of personal income sources shown in the table indicates that net earnings growth was positive in all MSAs except for Little Rock.  (Net earnings includes wage and salary disbursements, supplements to wages and salaries, and proprietors’ income.)  Transfer receipts provided substantial support for personal income in all of Arkansas metro areas, especially the smaller MSAs.

— Updated Aug 10, 12:35 PM to include data for Memphis.

Metro Area Employment Summary – 2011:Q2

By , August 3, 2011 10:38 AM

The latest data on employment and unemployment for Arkansas’ metro areas indicates that  unemployment rates have been increasing across the state.  This morning’s news release from the Bureau of Labor Statistics reported that “unemployment rates were lower in June than a year earlier in 224 of the 372 metropolitan areas…”  Unfortunately, none of Arkansas’ metro areas were included in that total.  In fact, unemployment rates in Arkansas have increased across the board during the second quarter of 2011. 

On a month-to-month basis, some of the June unemployment rates reported today jumped substantially higher than May.  However, higher unemployment in June is a recurring seasonal phenomenon.  After adjusting for seasonality, the increases in unemployment rates were more modest — but they were increases, nonetheless.  The June jump in unemployment was largest in Fort Smith (+0.5 percentage points), but was also substantial in Fayetteville, Hot Springs, and Pine Bluff (+0.3 percentage points each).  Unemployment in the Little Rock MSA was essentially unchanged. 

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

When the statewide data was released, we noted that June’s payroll survey indicated somewhat greater strength in labor markets than did the household survey.  The same is true of the metro area data.  Nonfarm payroll employment declined in four of the state’s MSAs, but  increased in three.   Hot Springs showed a particularly large drop in payroll employment in June.  However, this only partly offset substantial increases registered in April and May.  Compared to a year ago, employment in both Hot Springs and Texarkana are up more than one percent.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Relative to the statewide trough in employment registered in February 2010, all but one of Arkansas’ MSAs have shown positive growth.  Employment in Pine Bluff remains 2.2% below the level of February 2010, but is slightly above a low-point registered in February 2011.  Compared to the start of the recession, employment changes range from down 6.3% in Fort Smith to essentially unchanged in Jonesboro.

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