Arkansas Economic Development Institute

Metro Area Employment and Unemployment – July 2013

By , August 28, 2013 12:09 PM

Unemployment rates in the state’s metro areas showed some improvement in July.  Compared to the previous year, not seasonally-adjusted data showed lower unemployment rates in six of the eight Metropolitan Statistical Areas (MSAs) that cover parts of Arkansas.  The largest decline was in Fort Smith (-0.8%).  The unemployment rate was unchanged in Memphis, and was up by 0.3% in Pine Bluff.

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

Smoothed seasonally adjusted estimates of unemployment rates also showed declines from June to July.  The unemployment rate in Hot Springs was unchanged, but each of the other Arkansas MSAs ticked downward.  The rate in Texarkana dropped by two-tenths.

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

Payroll Employment
Data on nonfarm payroll employment were mixed.  From June to July, employment rose sharply in Fayetteville and Texarkana.  Hot Springs and Jonesboro also showed increases.  Employment was unchanged in Little Rock, but declined in Fort Smith, Pine Bluff and Memphis.  Six of the eight MSAs have shown positive employment growth over the past year, and all but Pine Bluff shown net increases since the national and statewide employment trough of February 2010.  Employment is now higher than pre-recession levels (December 2007) in four of the eight MSAs.

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

FHFA House Prices – 2013:Q2

By , August 22, 2013 12:46 PM

New data from the Federal Housing Finance Agency (FHFA) showed that home prices continue to rise, although the rate of increase in Arkansas remains below the national average.   Among the various indexes published by the FHFA, the most informative is the “Expanded-Data Index,” which incorporates data from FannieMae, FreddieMac, FHFA as well as county records.  By this measure, Arkansas house prices in the second quarter were unchanged from the previous quarter, but were up 2.7% from a year ago.  Nationwide, the Expanded-Data Index showed prices up 2.4% from the previous quarter and up 7.5% from 2012:Q2.  As shown in the chart below, it is not surprising that Arkansas house price appreciation is slower than the national average:  During the nationwide home price crash, declines in Arkansas were far smaller than for the U.S. as a whole.  Compared to the peak of home prices in early 2007, prices in Arkansas are down 5.6% while the nationwide average is down 17.6%.

Source: Federal Housing Finance Agency

Data for Arkansas’ metro areas showed that the upward momentum in house prices is widespread.  According the FHFA “All-Transactions Indexes” (which include sales and refinancings), prices were flat in the Little Rock metro area but were up in all other parts of the state.  Over the past year, the largest price increases have been in the Fayetteville-Springdale-Rogers MSA — which had also experienced the largest decline from 2007-2010.  Prices have also been rising at a brisk pace in Texarkana, Hot Springs, and Jonesboro.  Over the past 5 years, prices have increased in Jonesboro and Texarkana, and have held steady in Fort Smith.

Source: Federal Housing Finance Agency; Seasonal adjustment by the Institute for Economic Advancement

The MSA house price data are broadly consistent with the CoreLogic® data that we discussed in a recent post.  Specifically, the CoreLogic data suggested that price increases in Fayetteville and Texarkana were particularly robust after excluding “distressed sales.”  The FHFA data are based on mortgages that are processed through FannyMae and FreddieMac, and are likely to under-sample distressed sales. The CoreLogic data also suggested that recent house price appreciation has been relatively slow in Fort Smith and Hot Springs.

The chart below illustrated the longer-run perspective, comparing FHFA house prices indexes for Arkansas’ MSAs from a common starting point:  2007:Q1.  Over that 6-1/2 year time span, prices have increased in all of the state’s metro areas except for Hot Springs, Memphis, and Fayetteville.  Prices in Northwest Arkansas suffered the state’s largest declines during the house price collapse — down almost 20% in early 2011.  But since that low-point, prices in the Fayetteville MSA have been showing significant recovery.  In Texarkana, the net change in house prices since 2007:Q1 has been an increase of over 10%.

Source: Federal Housing Finance Agency; Seasonal adjustment by the Institute for Economic Advancement

 

Arkansas Employment and Unemployment – July 2013

By , August 19, 2013 10:53 AM

The latest report on state-level employment and unemployment suggests ongoing weakness in Arkansas labor markets.  The unemployment rate edged up to 7.4% (although the increase from June’s 7.3% rate was literally a matter of rounding error).  At 7.4%, the Arkansas unemployment rate is unchanged from a year ago and is now at the same level as the U.S.  This is the first time since the early months of the recession that the Arkansas unemployment rate has not been lower than the national average.

Source: Bureau of Labor Statistics

July’s uptick in the unemployment rate was primarily due to a decline in the number of employed persons (-4,764).  The number of unemployed was basically unchanged (+37).  Due to the fall in employment, the overall size of Arkansas’ labor force declined — resuming the trend that we’ve seen over the past year-and-a-half.  Since January 2012, the Arkansas labor force is down by nearly 40,000 — approximately 2.9%.

Source: Bureau of Labor Statistics

Payroll Survey:
Total nonfarm payroll employment was up by 1,900 in July (seasonally adjusted) — a fairly modest increase but a welcome change from the declines of the two previous months (revised).  Goods-producing sectors showed a collective decline of 1,600 jobs while service-providing sectors expanded by 3,500 — mostly in the areas of Health Services and Professional & Business Services.  Compared to a year ago, Arkansas employment is up by 13,600, mostly from increases in Health Services, Retail Trade, and Transportation & Utilities.

Source: Bureau of Labor Statistics

As with the household survey, the data from the payroll survey indicate that the pace of Arkansas’ recovery from the 2008-09 recession is lagging behind the U.S. average.  Although the recession did not hit Arkansas as hard as the rest of the country, employment at the national level has shown steady improvement while Arkansas’ employment growth has been irregular and slower, on net.  As of July 2013, cumulative changes in employment since the beginning of 2008 measure -1.5% for the U.S. and -1.8% for Arkansas.

Source: Bureau of Labor Statistics

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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 Home Prices – New Data for June

By , August 9, 2013 11:02 AM

Some new information on Arkansas home prices was released earlier this week by CoreLogic®, a data and analytics company.  For the nation as a whole, the report showed an increase of 11.9% from June 2012 to June 2013.  The home price index for Arkansas showed an increase of 2.2% over the same period.

The CoreLogic data also report changes in home prices after excluding so-called “distressed” sales — which include properties that have been through foreclosure and those that are exchanged in “short-sales” (in lieu of foreclosure) . After removing these homes from the sample, the rate of price appreciation nationwide was 11% year-over-year — little different from the full sample that includes distressed sales.  For Arkansas, home prices excluding distressed sales were up 3.6%.  The higher rate of appreciation for non-distressed sales in Arkansas suggests that foreclosures and delinquencies continue to hold down the overall rate of home price increase in the state.

The CoreLogic data also cover prices for individual metropolitan areas.  As shown in the table below, rates of home price appreciation (and depreciation) vary across the state.  For the 12 months ended June 2013, the highest rate of appreciation was in Jonesboro — up 6.4%.  Excluding distressed sales, the Jonesboro increase was 6.1%, indicating that the impact of distressed sales in the Jonesboro market is small and/or dissipating.  In contrast, prices declined by 1.2% in Texarkana, but were up by nearly 10% after excluding distressed sales from the data.

Source: CoreLogic

The data from CoreLogic track prices using a repeat-sales methodology, similar to that used by the national S&P/Case-Shiller index and the FHFA data that are routinely tracked here on the Arkansas Economist.  Although accessibility of the CoreLogic data is not as extensive as the FHFA data, the CoreLogic data provide up-to-date snapshots of home price appreciation and are unique in their attention to the effects of distressed sales on overall home prices.  FHFA data on home prices in the second quarter of 2013 will be released on August 22.  It will be interesting to see how those data compare to the information from the CoreLogic indices.

Arkansas Taxable Sales – 2013:Q2 (Preliminary*)

By , August 7, 2013 10:02 AM

Although the information is not yet complete, preliminary data on Arkansas Taxable Sales (ATS) in the second quarter indicates a resumption of robust growth in consumer spending.  In the first quarter of the year ATS growth slowed to near zero (+0.2%, revised), but the preliminary second quarter figures put the growth rate at 3.1% (seasonally adjusted).  The first quarter slowdown coincided with flat personal income growth, largely associated with changes in Federal tax rates.

Slightly lower gasoline prices along with a drop in the number of gallons sold led to a 5.0% decline in expenditures on gasoline.  Consequently, Arkansas Taxable Sales Including Gasoline (ATSIG) increased by only 2.4% in the second quarter.

Compared to a year earlier, ATS was up 4.3% and ATSIG was up 3.8%.

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

 

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

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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 2013:Q2(P) (Excel file)

* Data are preliminary until the release of the DFA report, Arkansas Fiscal Notes for July 2013, and will be updated when information becomes available.

A Snapshot of Home Foreclosure Activity in Arkansas

By , August 1, 2013 11:10 AM

This just in:  The data-provider CoreLogic* has released new data on home foreclosure activity in Arkansas.  The data for May show that the state’s foreclosure rate was 1.82%, up from 1.58% in May of 2012.  The U.S. average for May 2013 was 2.61%, down from 3.46% a year earlier.  These rates reflect the percentage of loans that are in some stage of the foreclosure process.

A broader indicator of homeowner financial distress–and a leading indicator of potential foreclosure activity in the future–is the 90-day delinquency rate.  At 5.34%, the delinquency rate for Arkansas was basically unchanged from a year earlier.  The U.S. rate declined over the same period, but is still slightly higher than the rate for Arkansas.

Source: CoreLogic

*More information about CoreLogic, a data and analytics company, can be found at CoreLogic.com

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