Arkansas Economic Development Institute

Arkansas Employment and Unemployment – November 2011

By , December 20, 2011 11:10 AM

The unemployment rate in Arkansas fell by two-tenths of a percent to 8.0% November.  According to data from the Bureau of Labor Statistics (BLS) and the Department of Workforce Services (DWS), the number of unemployed Arkansans declined by 3,219.  The household survey also showed an increase of nearly 10,000 employed, so the unemployment rate declined in the context of a sharp increase in the labor force.

Source: Bureau of Labor Statistics

The independent payroll survey also showed a significant increase in employment.  Total nonfarm payrolls increased by 7,100 for the month, a gain of 0.6% (seasonally adjusted*).  According to the press release from the BLS, this was the second-largest over-the-month percentage increase in the nation (employment in South Carolina increased by 0.9%).  As shown in the table below, gains were prominent in service-providing sectors — particularly Professional & Business Services (+2,500) and Education & Health Services (+2,000).  Gains in Retail Trade employment also boosted the Trade, Transportation & Utilities category, which increased by 1,100 jobs.  The November data also showed a sharp increase in Manufacturing employment (+1,400). 

Source: Bureau of Labor Statistics

Since peaking in April 2011, employment in Arkansas had been on the decline for much of the year.  The November increase (on top of a revised 1,200 job gain in October) represents a welcome reversal of that trend.  On net, however, employment remains 1,200 below the April peak.  Compared to the trough registered in February 2010, employment in Arkansas has increased by 29,400.  Nevertheless, the total number of jobs remains 29,100 below the level recorded at the start of the recession in December 2007. 

Source: Bureau of Labor Statistics

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*Seasonally adjusted data for nonfarm payroll employment, reported in a format compatible with the monthly news release from the Arkansas Department of Workforce Services, are available hereTable – Seasonally Adjusted NFPE.

Arkansas Personal Income – 2011:Q3

By , December 19, 2011 11:17 AM

New figures from the U.S. Bureau of Economic Analysis show that total personal income in Arkansas declined slightly in the third quarter, down $57 million or 0. 06%.  In addition, data for the first two quarters of 2011 were revised downward.  Previously-released data showed growth rates of 1.4% and 1.3% in the first two quarters of the year, while the new data show growth of only 0.9% and 0.7%.

Nationwide, personal income growth slowed considerably in the third quarter, growing at only 0.1%.  This represents a sharp deceleration from the 1.3% pace of the previous four quarters.  The chart below shows the growth slowdown for the U.S., and illustrates that income growth in Arkansas has been slowing relative to the national average over the past year.  As of the third quarter, total personal income for both Arkansas and the U.S. are 3.1% higher than the previous peak (in the second quarter of 2008). 

Source: Bureau of Economic Analysis

Many of the important components of Arkansas personal income were positive, although the magnitude of the changes were very small.  Nonfarm income was up slightly (+$ 25 million or 0.02%), while the overall downturn was concentrated in farm income, which was down $81 million — a 12.5% drop from the previous quarter.  The decline in farm income was, in turn, concentrated in proprietors’ income, which was down $84 million or 24.3%.

The only other components of Arkansas income that contracted in the third quarter was personal current transfer receipts.  This component, which includes all sources of transfer payments to individuals from government entities, was down by $141 million, or 0.6%.  As discussed in previous posts, transfer payments tend to provide temporary support for incomes during economic downturns, so a measure of total income that excludes transfers provides a better indication of the underlying growth of the private-sector economy.  The chart below compares Personal Income Less Transfer Payments for the U.S. and Arkansas.  By this measure, the relative slowdown in growth for Arkansas is even more pronounced. 

Source: Bureau of Economic Analysis

 Given the weak performance of Arkansas’ labor markets this year, it is not surprising that personal income growth has lagged behind the rest of the nation.  When it comes to potential drivers of this slowdown, the extraordinary weather events of 2011 are a likely culprit.  The tornados and floods in the spring, followed by the summer drought, had measurable impacts on Arkansas agricultural sector.  The good news is that weather is a temporary factor:  This year’s weakness in agricultural incomes (along with their ripple-effects on the rest of the Arkansas economy) are unlikely to have lasting effects on income growth.

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