Institute for Economic Advancement

Arkansas Home Sales – December 2013

By , January 29, 2014 3:48 PM

Arkansas home sales ended the year on a strong note, with December sales up 17.6% from the previous year.  The year-end data from the Arkansas Realtors® Association confirmed that the slight dip recorded in November was an aberration — likely associated with the fact that the Thanksgiving holiday fell at the end of the month.  For November and December combined, sales were up 6.8% from the previous year.  The total for December was the highest recorded for that month since 2006.

ARA_1213_NSA

Source: Arkansas Realtors® Association

Annual totals from the Realtors’ data showed that sales were up 12.7% for the year.  In fact, this figure probably understates the true growth rate.  It is not uncommon for late-reported sales to result in upward revisions to the total figures, so the numbers for November and December are likely to be even higher when all the data are in.  As shown in the figure below, seasonally-adjusted sales showed a significant surge in 2013, representing a long-awaited recovery from the lackluster pace of 2011 and 2012.

Source: Arkansas Realtors® Association, seasonally adjusted by the Institute for Economic Advancement

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

Some of the rapid growth in home sales during 2013 was associated with demand overhang from the previous two years.  As a result, sales growth in 2014 is likely to be slightly lower.  Nevertheless, statewide home sales are still well below their pre-recession pace, so there is plenty of room for expansion.  In addition, historically low home mortgage rates should continue to foster a favorable environment for prospective home buyers.  The Arkansas Economist’s forecast for home sales in 2014 (from the November Forecast Conference) is for an increase of 7.2% compared to 2013.

Arkansas Employment and Unemployment – December 2013

By , January 28, 2014 7:12 PM

The unemployment rate in Arkansas fell by 0.1% in December to 7.4%.  Although the decline was smaller than the 0.3% decline in the national unemployment rate in December, it represented movement in the right direction. Over the past two years, the national unemployment rate has fallen by about 1.5 percentage points, while the Arkansas rate has been stuck in the range of 7% to 7.5%.  During the recession of 2008-09 and for much of the subsequent recovery, Arkansas’ unemployment rate was significantly lower than the U.S. average.  However, recent data show that the rest of the nation has overtaken Arkansas in terms of progress toward lower unemployment.

URATES-AR&US-1213

Source: Bureau of Labor Statistics

Today’s report showed that the number of employed Arkansans increased by approximately 3,200 in December, and that the number of unemployed declined by 600.  This represents the second consecutive month that the household survey has shown higher employment and lower unemployment.  As shown in the set of charts below, these changes represent a welcome change from trends in recent months.

AR-LAUS-Dec2013

Source: Bureau of Labor Statistics

Payroll Survey
The payroll survey showed a net decline of approximately 900 jobs in Dececember.   Construction employment was down for the month, although it remained 1,400 higher than in December 2012.  Manufacturing employment showed no net change for the month.  More surprising was the weakness in service-providing sectors: Some of the sectors that have been strong performers in recent months showed net employment declines in December, including Professional and Business Services (-1,100), Education and Health Services (-100) and Leisure and Hospitality Services (-300).  On the other hand, increases were reported for both the Wholesale and Retail Trade sectors.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Overall, the payroll data show a net employent increase of 12,600 jobs since December 2012.  But over the same period, the household survey has shown a net decline in employment of over 22,000. This was the final report for 2013, but the data are subject to subsequent revision.  In late February the BLS will release updated estimates of household employment and unemployment, then in mid-March, the annual “benchmark revisions” for nonfarm payroll employment will be released.  As noted in previous posts, the payroll data are likely to be revised downward, but it appears unlikely that the downward revision to payroll employment estimates will be enough to bring the two surveys back into alignment.  At this point, it remains an open question as to which survey is providing more accurate readings on the state of Arkansas labor markets.  Given current data, however, neither survey is suggesting a particularly strong performance.

Source:  Bureau of Labor Statistics

Source: 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, can be found hereTable-Seasonally Adjusted NFPE.

Metro Area Employment and Unemployment – November 2013

By , January 10, 2014 12:08 PM

Data on metro area unemployment rates that came out earlier this week indicated that Arkansas metro areas are generally not following the improving trend seen in the nationwide data.  The news release from the Bureau of Labor Statistics noted that November unemployment rates were lower than a year earlier in 293 of the nation’s 372 metropolitan areas.  In Arkansas, only Fort Smith was included in this count.  As shown in the table below, year-over-year unemployment rate increases ranged from +0.1% in Fayetteville and Jonesboro to +1.1% in Pine Bluff.  The rate was down 0.4% in Fort Smith.

MSA-URATES-1113-NSA

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

Smoothed seasonally adjusted estimates for unemployment showed monthly increases in Hot Springs, Little Rock, Memphis, and Texarkana. The unemployment rate in Fort Smith was down 0.1% from the previous month.  For the remaining metro areas (and the statewide average), unemployment was unchanged from October to November.

MSA-URATES-1113-SSA

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

Payroll employment data for Arkansas metro areas were mixed.  Although statewide employment increased by 3,000 (+0.3%) in November, three of the state’s metro areas showed monthly declines (Fort Smith, Jonesboro, and Texarkana) and employment in Pine Bluff was unchanged.  The four remaining metro areas saw increases ranging from 0.2% in Little Rock to 0.8% in Hot Springs.  Compared to a year ago, payroll employment is down Hot Springs, Pine Bluff and Texarkana, but has increased in the remaining metro areas.

MSA-NFPE-1113

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

Since the employment trough of February 2010, most of the state’s metro areas have shown net employment increases.  However, employment in Texarkana seen a recent decline that erased earlier gains and employment in Pine Bluff has continued a downward trend that began well before the 2008-09 recession.  Compared to the pre-recession peak, only three metro areas have shown net increases:  Jonesboro, Fayetteville, and Little Rock.

Arkansas Home Sales – November 2013

By , January 7, 2014 12:12 PM

The Arkansas Realtors® Association announced this morning that home sales in November 2013 were down 2.8% from the previous year.  There are at least two reasons that this report should not detract from the overwhelmingly upbeat year that 2013 represented for Arkansas home sales.  First, November is typically one of the lower sales months of the year.  As shown in the not-seasonally adjusted data below, most of the sales in any given year are concentrated in the summer months, with November through February being relatively slow (the exception being November 2009, when the Federal home-buyer’s tax credit boosted sales late in the year).  With such a strong summer season in 2013, a seasonal slowdown toward the end of the year will have little effect on annual totals.

ARA_1113

Source: Arkansas Realtors® Association

The second reason to remain upbeat about the November 2013 sales report is the fact that November 2012 was a relatively strong sales month.  The rising trend in home sales that became evident in mid-2013 actually began in late 2012, with November being the strongest month of 2012 in seasonally-adjusted terms.  As illustrated in the seasonally-adjusted graph below, the November 2013 report does represent a drop-off from the rapid sales pace earlier in the year, but it remains above the lackluster trend that we saw from late 2010 through mid-2012.

ARA_1113_SA

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

This morning’s report showed that year-to-date sales remained 11.8% higher than in 2012.  With only one month’s data remaining to be tabulated, it is clear that home sales in 2013 will represent a double-digit rate of increase from the previous two years.

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