Arkansas Personal Income – New and Revised Data

By , October 25, 2013 1:23 PM

Arkansas personal income increased by 0.6% in the second quarter, compared to a 1.0% increase in the U.S. data.  Compared to a year earlier, Arkansas personal income was up 2.1%.  Nationwide, the four-quarter increase was 2.6%.

The most recent report also incorporated the latest comprehensive (benchmark) revision of the data.  As illustrated in the chart below, the newly revised data suggest that the drop in incomes during the 2008-09 recession was slightly less severe — but more protracted — than indicated by the pre-revision data.  Previously-published data showed a peak-to-trough decline of 4.7% (from 2008:Q2 through 2009:Q3).  The new data show a downturn off only 3.5% for the same period, but with a slower trajectory of recovery through 2010.  Since the beginning of 2011, however, the revised data show a slightly higher growth rate than previously reported.

Source: Bureau of Economic Analysis

Data for U.S. personal income were also revised, altering the comparison of Arkansas and U.S. income growth during the recession and recovery.  As shown in the next figure, the new data suggest that the downturn in Arkansas was nearly as large as the U.S. average.  Previously, the data suggested that Arkansas’ downturn was not as severe as the nation’s.  On the other hand, the upward revision to Arkansas data in 2011 and 2012 now indicates that Arkansas is on a more rapid path of recovery than the nation as a whole.  As of the second quarter of 2013, personal income in Arkansas is 12.9% higher than its pre-recession peak.  U.S. personal income has shown a net increase of 11.9% over the same period.

Source: Bureau of Economic Analysis

The newly-revised data had little impact on estimates of how recent changes in tax policy has affected personal income growth (see previous post).  The expiration of the payroll tax holiday at the beginning of the year is estimated to have lowered first quarter growth by approximately 0.9%.  The surge in dividend income in the fourth quarter of 2012 (to avoid higher income tax rates in 2013) added at approximately 0.7% to end-of-year income — subtracting a commensurate amount from first quarter growth.  Combined, these two effects reduced first-quarter growth by 1.6%.  The reported first-quarter growth rate of -0.9% (revised) would have been approximately +0.7% in the absence of these changes in tax policy.

Sources: Bureau of Economic Analysis, Institute for Economic Advancement

Adjusting for the expiration of the payroll tax holiday.  Income growth from 2012:Q2 through 2013:Q2 would have been approximately 3.1% for Arkansas and 3.6% for the U.S.

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Note:  Our analysis of the second-quarter personal income data was delayed by the Federal government shutdown.  The data were originally released on September 30, but were inaccessible from October 1 through October 16 while the website of the Bureau of Economic Analysis was non-functional.

Metro Area Unemployment Rates – August 2013

By , October 22, 2013 12:13 PM

Catching up from the federal government shutdown, the Bureau of Labor Statistics released August unemployment rates for the nation’s Metropolitan Statistical Areas (MSAs) yesterday.  The data were originally scheduled to come out on October 2.

For Arkansas’ metro areas, the results were decidedly mixed.  The not-seasonally adjusted data showed year-over-year unemployment rate changes that ranged from +0.6% in Pine Bluff to -0.7% in Fort Smith.  From August 2012 to August 2013, the unemployment rate declined in three MSAs and increased in four.  In Little Rock (and statewide) the rate was unchanged.

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

Monthly changes — calculated using smoothed seasonally adjusted estimates — were also mixed.  From July to August, the unemployment rate declined in Fort Smith, Memphis and Texarkana.  It was up one-tenth in Pine Bluff, and unchanged in the remaining metro areas.

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

Note:  Payroll employment statistics were compiled before the government shutdown, and were previously reported on Arkansas Economist (here).

August Home Sales

By , October 8, 2013 12:01 PM

The August report from the Arkansas Realtors® Association (ARA) confirms that residential real estate markets in Arkansas are finally recovering from the recession/housing-crash.  And the recovery is substantial:  Sales for August were up 24% compared to August of last year.  Cumulative year-to-date figures show sales rising 12.7% from 2012.  As shown in the chart below, the August sales total of 2,818 was the highest single monthly total since the onset of the recession.  The last time sales exceeded 2,800 in a single month was August 2007.

Source: Arkansas Realtors® Association

The August sales figures represent the final month of the typical June-July-August peak period for home sales.  As is evident from the not-seasonally adjusted data, sales typically taper-off during the remaining months of the year.  But even at the slower expected pace for the remainder of the year, 2013 sales are likely to approach 26,000 — the highest annual sales volume since 2007.  For the year as a whole, a growth rate approaching 10% would not be surprising.

Seasonally adjusted data–shown below–reveal that the pace of home sales has been accelerating over the past few months.  Even with the rising trend, the August sales figure represents a clear break-out.

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

Data for individual counties shows that strong sales growth is a state-wide phenomenon.  Northwest Arkansas continues to be the strongest region in the state.  Combined sales for Benton and Washington Counties are up 21.9% year-to-date.  Among the eight counties with the highest sales volume, Pulaski County is the only one showing less than double-digit growth.  Nevertheless, the combined growth rate for the Central Arkansas counties of Pulaski, Saline, and Faulkner is 12.0%.

Source: Arkansas Realtors® Association


Metro Area Employment – August 2013

By , October 3, 2013 1:29 PM

Yesterday was the scheduled release date for metro area employment and unemployment data from the Bureau of Labor Statistics, but no report was published due to the Federal government shutdown.  Nevertheless, data on payroll employment for metro areas had already been posted on the BLS website, so we do have some new figures to report.

As previously reported, statewide payroll employment declined by 1,200 jobs in August — approximately 0.1%.  The table below shows that employment declines were spread across several of the state’s metro areas.  Job losses were particularly sharp in Jonesboro (-0.6%), Hot Springs (-0.5%), and Texarkana (-0.5%).  Employment in Northwest Arkansas was unchanged from the previous month, and both Little Rock and Pine Bluff saw small employment increases.

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

Over the past year, employment growth has been positive for most of the state’s metro areas, with the prominent exceptions of Hot Springs and Pine Bluff.  Since the national and state employment trough of February 2010, all metro areas except Pine Bluff have seen net increases.  Compared to pre-recession employment levels, however, only Fayetteville, Jonesboro, and Little Rock have experienced net positive job growth.

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