Arkansas Employment and Unemployment – November 2012

By , December 21, 2012 11:14 AM

New data from the Bureau of Labor Statistics and Department of Workforce Services show the Arkansas unemployment rate fell two-tenths of a percent to 7.0% in November.  The number of unemployed fell by 2,359 to 95,935.  Both the unemployment rate and the number of unemployed were at their lowest levels since January of 2009.  However, household survey also showed that the number of employed persons dropped by 6,305.  Consequently, the labor force contracted by 8,664.  November’s decline represents the sixth consecutive monthly decline in the labor force, and this drop accounts for at least some of the fall in the unemployment rate.

Source: Bureau of Labor Statistics

Payroll Employment
Seasonal factors become particularly relevant this time of year, as colder weather and holiday shopping affect employment patterns in a number of sectors.  The not-seasonally-adjusted statistics for payroll employment showed a decline of 1,100 jobs in November, while the seasonally adjusted statistics showed an increase of 2,000.  For example, construction is one sector where seasonal considerations play an obvious role:  without any seasonal adjustment, the number of construction jobs declined by 1,500.  But the seasonally adjusted figures showed a a slight increase.  Other sectors that experienced largely seasonal declines in November included  Leisure & Hospitality and Professional & Business Services.   On the other hand, employment in the Retail Trade sector was up by 4,000 for the month (not seasonally adjusted), but much of that increase was a typical seasonal phenomenon (seasonally adjusted retail employment was up only 800).   Seasonal movements in employment are certainly of interest in their own right, but seasonally-adjusted figures facilitate comparisons aver time that are better-suited to evaluate business cycle conditions — in this case, progress toward recovering jobs that were lost in the 2008-09 recession.

The table below shows seasonally-adjusted changes in employment over the past month and the past year, as well as comparisons with the previous employment peak (Dec 2007) and trough (Feb 2010).  Month-to-month changes were positive in the good-producing sectors, but were down in many of the service-providing sectors.  Compared to November of the previous year, employment was up in most sectors, but lower in Information, Financial, and Professional & Business services.  Construction employment was also down sharply from the previous year.  Overall, the most recent published data show that employment has increased by 22,100 since the trough of February 2010, but is still down 35,700 from the start of the recession.

Source: Bureau of Labor Statistics

As discussed in recent posts (here, for example) the payroll data for 2011 and early 2012 are expected to be revised upward significantly when the benchmark revisions are released next March.  The expected revisions raise the path of payroll employment significantly — particularly in the fourth quarter of 2011.  For the third and fourth quarters of 2012, the revisions are expected to increase measured employment  by over 13,000 jobs.  As shown in the table below, these revisions paint a much rosier picture of progress toward recovery from the 2008-09 recession.  After the expected revisions, November’s employment figures show a recovery of nearly 36,000 jobs since February of 2010, and a shortfall of only 22,000 jobs compared to the month immediately preceding the recession.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

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*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, are available hereTable – Seasonally Adjusted NFPE.

Arkansas Personal Income – 2012:Q3

By , December 19, 2012 2:24 PM

Total personal income in Arkansas rose by 1.0% in the third quarter, with a particularly sharp increase in farm income.  According to today’s news release from the Bureau of Economic Analysis (BEA), Arkansas’ third-quarter growth rate was the second-highest in the nation (North Dakota had the highest growth rate).  Data for the first two quarters of the year were also revised upward — from 0.8% to 1.0% in the first quarter and from 1.2% to 1.4% in the second quarter.  Compared to the third quarter of 2011, personal income in Arkansas is up 3.8%.  For the total United States, income growth was 0.4% in the third quarter, and has totaled only 2.4% over the past four quarters.

Source: Bureau of Economic Analysis

Inflation (as measured by the price index for Personal Consumption Expenditures) rose at a rate of 0.4% in the third quarter, up from a 0.2% pace in the second quarter.  Consequently, real personal income in Arkansas rose by only 0.6% in the third quarter, and was up just 2.2% over the past year.  After this inflation-adjustment, Arkansas personal income is now slightly above its previous cyclical peak (by about 1.4%).

Source: Bureau of Economic Analysis

Arkansas was one of several agricultural states for which farm income figured prominently.  For the third quarter alone, farm income was up 19.6%, and accounted for approximately one-third of the state’s income growth.  The BEA report cited two special circumstances affecting agricultural income in the third quarter — both associated with the summer’s drought conditions.  One key factor was net insurance settlements — particularly in the states of the upper Midwest where crop damage from the drought was the most extensive.  In the south, third quarter farm income was also affected by a relatively early harvest season.  (The BEA cited Texas, in particular.)  As noted in previous posts, Arkansas farm output was not as severely affected by the drought due to the high proportion of irrigated farmland in the state, but weather conditions were such that crops were both planted and harvested earlier than usual.

Other than agriculture, earnings growth by industry in Arkansas generally mirrored the national averages.  Sectors with strong earnings growth included durable goods manufacturing, professional services, and health care & social assistance.  Transportation and warehousing fared well in Arkansas, but contributed little to the nation’s income growth.  On the other hand, earnings in the construction industry were weaker in Arkansas than for the nation as a whole (although the BEA report noted that construction income was particularly concentrated in Texas and Oklahoma).

Source: Bureau of Economic Analysis

Arkansas Taxable Sales Update

By , December 4, 2012 12:23 PM

Figures released this morning by the Arkansas Department of Finance & Administration show sales tax receipts were up 3.8% in November from a year earlier.  Generally, remissions of sales taxes correspond to sales that took place in the previous month, so the newest information indicate that Arkansas Taxable Sales (ATS) recovered substantially in October.  Sales tax receipts over the past four months have been considerably weaker than expected, falling notably below their trend growth rate.  The latest increase doesn’t replace the revenue shortfall that accumulated in prior months, but it does bring ATS closer to the average growth path that has emerged since the end of the recession.

Sources: Dept. of Finance & Administration, Oil Price Information Service, Institute for Economic Advancement

Average gasoline prices in Arkansas were down slightly in October (falling to $3.50 from $3.65 in September), but a forecast increase in sales volume is expected to boost total spending on gasoline for the month.  As a result, preliminary figures for Arkansas Taxable Sales Including Gasoline (ATSIG) suggest an increase of 4.1% in October compared to the previous year.

Third Quarter Revisions
Complete data are now available for ATS and ATSIG for the third quarter of the year.  The final figures for September were slightly higher than the estimates used to project preliminary data. As a result, third quarter taxable sales were down 2.5%–an improvement from the 3.4% contraction in the preliminary report.  Compared to the previous year, third quarter ATS and ATSIG were both down 0.5%.

Sources: Dept. of Finance & Administration, Oil Price Information Service, Institute for Economic Advancement

There is no obvious explanation for the weak taxable sales in recent months.  But the rebound in October is an encouraging sign as we move into the critical holiday sales season.  Overall, taxable sales in the fourth quarter are expected to be about 3 to 3-1/2% above their 2011 pace.

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Arkansas Taxable Sales (ATS) is calculated by the Institute for Economic Advancement to serve as a timely proxy for 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 2012:Q3 (Excel file)

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