Arkansas Economic Development Institute

Arkansas Home Sales Up Again in February

By , March 28, 2014 1:36 PM

The Arkansas Realtors® Association reported this morning that February home sales were up 12.6% from the previous year.  For the first two months of 2014, home sales are up 11.5%.  January and February are typically slow months of the year, but it is noteworthy that sales are up from 2013:  Last year turned out to be a fairly strong sales year overall, and the harsh winter weather so far in 2014 has probably meant delays for some home buyers.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The table below shows sales for the largest 10 counties in the state.  Sales were up sharply in 6 of the 10, with modest declines in Lonoke, Washington and Pulaski counties.  Home sales in Sebastian County were down 13.5% from the February 2013; however, Sebastian County sales were particularly strong in Februrary 2013 (up 27% from the previous year).  As a matter of fact, each of the counties that showed sales declines in February of this year had particularly strong sales growth a year ago.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Looking at the two largest metro areas, the sales figures for individual counties average out to provide a more consistent view of sales growth.  Total home sales in Benton and Washington Counties were up 12.2% in February, and up 8.7% for the first two months of the year.  Combining the Central Arkansas counties of  Faulkner, Lonoke, Pulaski and Saline, February sales were up 11.8% from a year ago.  Cumulative sales for the first two months of the year were up 5.9% for the four Central Arkansas counties.

Arkansas Employment & Unemployment – February 2014

By , March 28, 2014 10:55 AM

The February labor market reports from the Bureau of Labor Statistics revealed another month of positive employment growth for the state.  The headline statistic was a decline in the unemployment rate from 7.3% to 7.1%.   The national unemployment rate ticked upward by 0.1% in February, so the drop in Arkansas’ rate brought the gap between the state and national unemployment rates down to 0.4%.  The Arkansas unemployment rate has now fallen 0.6% in the past 6 months, and it is 0.4% lower than a year ago.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The underlying data from the household survey showed a continuation–and acceleration–of recent positive trends.  The number of unemployed declined by nearly 2,900, bringing the cumulative 6-month decline to more than 7,900.  The number of employed rose by more than 5,300, raising the 6-month increase to over 13,700.

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

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

Payroll Survey
The report on nonfarm payroll employment was similarly upbeat.  The number of jobs increased by 800 in February (seasonally adjusted), following an upward revision to the data from January.  After two years of stagnant job reports, payroll employment has increased by 18,000 over the past 6 months.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The table below breaks down the recent employment gains by sector.  The data show another strong month for goods-producing sectors, with Construction up by 800 and Manufacturing up by 700.  In the past 6 months we’ve seen a total increase of 6,600 in these two sectors alone.  Employment changes in service-providing sectors were mixed in February, with increases in Retail Trade and Education & Health Services offset by losses on Professional & Business Services, Financial Services, and Other Services.  Since the employment trough of February 2010 Arkansas has seen a cumulative increase of 40,200 jobs, but we remain 16,800 jobs below the employment levels that prevailed before the recession of 2008-09.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

# # #

*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.

Arkansas Personal Income – 2013:Q4

By , March 25, 2014 3:11 PM

New data from the Bureau of Economic Analysis (BEA) shows that Arkansas personal income rose by only 0.2% in the fourth quarter of 2013, compared to a growth rate of 0.6% for the U.S.  Over the four quarters from 2012:Q4, growth was 0.7% in Arkansas and 1.4% for the U.S.  The year-over-year growth rates are distorted by the expiration of the payroll tax holiday at the end of 2012.  In the absence of that change in tax policy, growth would be nearly one full percentage point higher.  Since the official end-date of the recession (2009:Q2), personal income growth has averaged approximately 3.7% for both the state and the nation.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Personal income data are not adjusted for inflation. To account for changes in purchasing power over time, the chart below uses the price index for personal consumption expenditures to illustrate real (inflation adjusted) personal income. After adjusting for price changes, real personal income in Arkansas was -0.1% in the fourth quarter and -0.3% over the most recent four quarters. For the U.S., quarterly real income growth was 0.3%.  From the fourth quarter of 2012, U.S. real income growth was 0.4%.

Sources:  Bureau of Economic Analysis, author's calculations

Sources: Bureau of Economic Analysis, author’s calculations

Annual Data for 2013
The news release from the BEA focused on annual averages for 2013 compared to the previous year.  On that basis, Arkansas income growth was 2.2%, compared to 2.6% for the U.S.  In terms of year-over-year growth, Arkansas ranked 35th among the 50 states.  The release noted that the national price index for personal consumption expenditures was 1.1% over the same period, implying real income growth rates of approximately 1.1% for Arkansas and 1.5% for the U.S.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The BEA news release also summarized data for per capita personal income.   Arkansas per capita income was $36,086, up 1.8% from 2012.  This figure represents approximately 81% of the national average.  Arkansas’ rank among the 50 states dropped from 45th to 46th.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

(Note:  If it were included in the state rankings, the District of Columbia would be ranked #1 with a per capita income of $74,513 — more than 67% above the national average.)

Earnings by Industry
Total earnings in Arkansas increased by 2.9% in 2013, compared to 3.4% nationwide.*  The table below summarizes earnings by industry.  Comparing Arkansas with the U.S. total, notable sectors of weakness included construction and manufacturing.  Earnings in several service-providing sectors in Arkansas exceeded nationwide growth rates; particularly in the categories of professional and business services.  Farm income in Arkansas also outpaced the national average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

__________

*Total earnings includes wages and salary disbursements, supplements to wages and salaries, and proprietors’ income.  It does not include dividends, interest and rent; or personal current transfer receipts — nor does it adjust for employer and employee contributions for government social insurance.

 

Metro Area Unemployment & Employment – January 2014

By , March 21, 2014 2:09 PM

The season of employment data revisions is almost over — but not quite.  A new report on metro area employment and unemployment from the Bureau of Labor Statistics includes some revised unemployment statistics for 2013, but the BLS data base will not be updated to reflect the full extent of data revisions until April 18.  The table below summarizes the revised unemployment data that were made available this morning.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

As we noted when the state unemployment revisions came out, the updated unemployment statistics included both good news and bad news.  The bad news was that the state unemployment rate had been higher in 2012 and 2013 than previously-published data had suggested.  The good news was that more recent data showed the unemployment rate trending downward.  The same is generally true for Arkansas metro areas.  Unemployment rates for January 2013 were revised upward by magnitudes ranging from 0.3 to 0.5 percentage points.   On the other hand, the new data for January 2014 show substantial declines in unemployment for some Arkansas metro areas.  Seven of the eight metro areas covering parts of Arkansas showed declines from a year earlier, with unemployment in Pine Bluff unchanged. Unemployment rates in Memphis and Fort Smith, in particular, have fallen dramatically since January 2013.

Payroll Data
In a post earlier this week, we reported on the revisions to payroll employment data for Arkansas metro areas for 2012 and 2013.  The table below shows the most recent updates to the monthly data–January 2014.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Employment increased in January in most of the state’s metro areas, with notable exceptions of Pine Bluff and Texarkana.  In both of those southern-tier metro areas, employment was down not only for the month, but down over the past year as well.  Pine Bluff and Texarkana are also the only metro areas in the state that have continued to shed jobs since the statewide employment trough of February 2010.  At the other extreme, Jonesboro and Fayetteville have both seen employment growth of nearly 10 percent since February 2010.  These two northern-most metro areas are also distinguished by the fact that they now have higher employment than at the onset of the recession.

 

Payroll Employment Revisions – Metro Areas

By , March 19, 2014 3:56 PM

The revised payroll statistics that were announced on Monday showed a cumulative downward revision to Arkansas employment that amounted to approximately 11 thousand jobs as of October.  That is, with more accurate source data and refined statistical models, we now know that the previously-published data were overestimating actual employment growth.  These revisions also had an impact on  payroll data for the state’s metropolitan areas.

The table below summarizes the impact of the revisions on metro area employment growth rates in 2012 and 2013.  The revisions affected data from April 2012 through December 2013, resulting in revised growth rates for both of those years.  Because there is considerable month-to-month variation in employment statistics for metro areas, the growth rates in the table are expressed in terms of fourth-quarter over fourth-quarter growth.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The revision resulted in slower measured employment growth for nearly all of the state’s MSAs in both years.  Two exceptions were Little Rock and Memphis, which saw slight upward revisions for 2012 growth.  Nevertheless, 2013 growth rates were revised downward in each case.   Another exception was Hot Springs, which saw an upward revision in its growth rate in 2013.  In the pre-revision data, only one metro area (Pine Bluff) had negative growth in 2012.  The revised data showed contractions in four of the eight metro areas.

The two figures below illustrate the nature of the revisions for all eight metro areas.  The data are indexed to equal 100 in the fourth quarter of 2007, so the paths shown in the two figures illustrate cumulative employment growth since the beginning of the great recession.  The previously published data showed that Jonesboro, Fayetteville and Little Rock were all in positive territory — that is, they had higher levels of employment in 2013:Q4 than in 2007:Q4.  With the data revisions, Little Rock dropped below the break-even point.  The metro area that suffered the largest qualitative loss was Fort Smith.  Pre-revision data had suggested positive job growth in Fort Smith for most of the past two years.  The revised figures show approximately zero growth over that period.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Arkansas Employment and Unemployment – January 2014

By , March 17, 2014 11:57 AM

The first employment report of the new year came out this morning, and the latest data suggest some positive developments.   The headline from this morning’s release from the Department of Workforce Services was that the unemployment rate declined from 7.4% to 7.3%.

As we have noted recently, the annual exercise of data revisions has revealed notable weakness in Arkansas labor markets during 2012 and 2013.  The unemployment rate has been persistently hovering around 7.5% as the national rate declined, and revisions to payroll employment were expected to show that fewer jobs were created last year than initial reports had suggested.  Nevertheless, the newly-revised data also indicate that trends in both household employment and payroll employment have been improving in recent months.

Household Employment
The unemployment statistics are based on a survey of households, with statistical models used to estimate changes in total employment and unemployment.  As we recently reported, the revised data indicate that employment was lower and unemployment higher than initially reported during much of 2012 and 2013.  But the new data also show an improving trend since August 2013.  As shown in the figures below, January was the fifth consecutive month in which employment increased and unemployment declined.   As a result of these improving trends, the unemployment rate dropped from 7.7% in July and August of last year to 7.3% in January 2014.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

While Arkansas’ unemployment rate remained stubbornly high at around 7.5% during 2012 and 2013, the national unemployment rate has been falling.  As a result, the national rate fell below Arkansas’ rate last summer.  We expect the downward trend to continue, for both Arkansas and the U.S., but with Arkansas now lagging somewhat behind.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
The payroll employment statistics that came out this morning reflected new benchmark revisions for the period April 2012 through December 2013.  As expected, the level of employment in mid-2013 was revised sharply downward — by approximately 11,000 jobs as of October 2013.  Nevertheless, the routine monthly revision of the December statistics and a relatively strong gain in January employment (+4,500, seasonally adjusted) combined to suggest a significant improvement in recent employment trends.  Consistent with the household data, the newly-revised payroll data show five consecutive months  of employment gains, with a cumulative increase of 16,800 jobs since August 2013.

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

The table below shows the breakdown of payroll employment by sector.  The pattern of employment gains in January was somewhat atypical of the post-recession pattern:  Some of the service-providing sectors which have been showing the largest gains since the end of the recession suffered declines in January, while goods-producing sectors showed some unexpected gains.  Particularly noteworthy was the increase in construction employment — up 2,300 on a seasonally adjusted basis.  Overall, nonfarm payroll employment was 12,400 higher in January 2014 than in January 2013.  That represents a cumulative increase of 39,000 jobs since the post-recession trough of February 2010.  Compared to pre-recession employment levels, however, we are still down by 18,000 jobs.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The revisions to both the household and payroll data show that labor market conditions in Arkansas were worse than we thought during much of 2012 and 2013, but both surveys indicate significantly improving conditions over the past five months.  In the long, slow process of recovery from the recession of 2008-09, we are still lagging behind pre-recession labor market conditions — but recent data indicate emerging favorable trends.

# # #

*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.

January Home Sales: A Strong Start to the New Year

By , March 14, 2014 1:43 PM

The Arkansas Realtors® Association announced this morning that home sales in January were up 8.7% from a year ago.  January is typically the slowest sales month of the year, usually accounting for less than 6% of the annual total sales.  Nevertheless, it is encouraging that the new year started out with a solid increase.  Home sales in 2013 overall were up 12.7% compared to 2012, and the new data suggest that the strong growth is continuing into 2014.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Among the 10 counties with the highest sales totals, only two showed decreases compared to last year – Faulkner (-30.9%) and Washington (-8.9).  In both of those counties, however, unusually strong sales in January 2013 biased the year-over-year comparison.  If we compare sales in January 2014 to  January 2012, all 10 counties showed significant increases.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Arkansas Unemployment – Worse Than We Thought

By , March 6, 2014 3:27 PM

The Bureau of Labor Statistics has completed its annual review of state unemployment statistics, with revisions that incorporate new population data and model re-estimation.  For Arkansas, the revised data show that the unemployment rate remained persistently high during 2012 and 2013.  Previously-published data had suggested that the unemployment rate declined to as low as  7.1% at the end of 2012.  The updated data indicate that Arkansas unemployment rate remained stuck at 7.5% through 2012 and into 2013.  The new data also show the unemployment rate rising to 7.7% during the summer months of 2013, before declining to 7.4% in December 2013.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The figures below show the revisions to the underlying components of the unemployment rate.  In late 2012 and early 2013, reports had suggested that the number of Arkansans unemployed dropped below 96,000.  The revised data indicate that the true number hovered closer to 100,000, before rising to 102,000 in August.  Meanwhile, the number of employed had been persistently overestimated:  The downward revision to household employment averaged more than 9,000 during 2012 and 2013, reaching a peak of nearly 21,000 in December 2012.  The net effect of these revisions was that the size of the Arkansas labor force had been also been persistently overestimated.

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

Source: Bureau of Labor Statistics

The downward revision to the level of household employment had the effect of reducing the magnitude of the measured change in 2013.  Nevertheless, the BLS news release notes that Arkansas had the dubious distinction of having the second-largest decline in the employment-population ratio among the 50 states plus D.C. (-1.0 percentage point).

Household vs. Payroll Employment
The revisions to the household employment data help to explain the puzzling divergence of the BLS’s two independent measures of state employment.  Before the revisions, household employment was showing a contraction of over 36,000 jobs from January 2012 through December 2013.  The revised data suggest that employment never rose as high as previously estimated, so the decline during 2012 and 2013 amounted to only 29,000 employed workers.  This drop-off is still inconsistent with the data from the payroll survey, which shows an employment increase of 16,500 over the two-year period.

We are only days away from the release of revised estimates for payroll employment (March 17).  The new payroll figures are likely to further narrow the gap between household and payroll employment (unfortunately).  Our latest — and final — projection for the downward revision is for a downward shift of 11,400 payroll jobs as of December 2013.*  If accurate, this would indicate that payroll employment expanded by only 5,000 jobs from January 2012 to December 2013.  This still leaves a puzzling gap between the employment estimates from the household and payroll surveys, but the unexplained discrepancy is narrowing as more accurate estimates emerge.

Source:  Bureau of Labor Statistics, Expected Revision Forecast by Institute for Economic Advancement

Source: Bureau of Labor Statistics, Expected Revision Forecast by Institute for Economic Advancement

The latest revisions to the household employment data and the expected revision to the payroll employment data might not fully reconcile the discrepancies between the two series, but they do share a common theme:  As weak as the Arkansas employment situation has appeared in recent months, emerging data suggest that it is even worse than we thought.

____

*The expected revision to payroll employment is forecasted using underlying data from the Bureau of Labor Statistics (Quarterly Census of Employment and Wages) and the Arkansas Department of Workforce Services (Arkansas Covered Employment & Earnings).

Panorama Theme by Themocracy

AWSOM Powered