Institute for Economic Advancement

Arkansas Taxable Sales – 2016:Q3

By , November 22, 2016 11:13 AM

After declining during the first half of the year, Arkansas Taxable Sales (ATS) rose 2.2% in the third quarter of 2016.  On a year-over-year basis, taxable sales were up 1.3% from the third quarter of 2015.  Gasoline sales also rose in the third quarter (+1.6%), despite a slight reduction in the average price of gasoline in Arkansas.  As a result, Arkansas Taxable Sales Including Gasoline (ATSIG) also rose by 2.2% from the second quarter to the third.  Over the past four quarters, ATSIG has increased by 0.6% while gasoline prices have fallen from $2.28/gallon in 2015:Q3 to $1.985 in the most recent quarter.

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

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

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

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

From the trough of the recession (2009:Q2) through the third quarter of 2016, ATS has grown at an average rate of 3.0%.  With gasoline expenditures falling at a 2.1% annual rate over the same period, ATSIG has increased at a 2.8% rate.  As measured by the price index for personal consumption expenditures, inflation has averaged 1.5% over the 7-year expansion, so that real (inflation adjusted) measures of ATS and ATSIG have grown at rates of 1.5% and 1.3%, respectively.

As shown in the final figure below, gasoline prices are at about the same level as at the trough of the recession–around $2/gallon.  However, spending on gasoline as a percent of total taxable sales has fallen to less than 5%, down from around 6% in 2009.  Although expenditures on gasoline have increased over the past 7 years, lower gas prices have allowed for spending on non-fuel items to increase as a share of total expenditures.

Sources: Arkansas 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 monthly and quarterly data is available here: Arkansas Taxable Sales 2016:Q1 (Excel file).

Arkansas Employment and Unemployment – October 2016

By , November 18, 2016 1:50 PM

Arkansas’ unemployment rate remained unchanged at 4.0% in October.   The underlying data from the household survey shows that the number of employed Arkansans declined for the 5th consecutive month, falling by 1,805.  The number of unemployed fell slightly (-368) after rising in the previous four months.

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

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

Payroll Employment
Arkansas nonfarm payroll employment increased by 300 in October (seasonally adjusted).  An increase of 1,700 jobs in Construction employment accounted for a net increase in goods-producing sectors.  Despite a strong increase in Professional and Business Services (+1,700), service-providing sectors contracted from September to Octobers, led by declines in Leisure and Hospitality (-700), Wholesale Trade (-500) and Retail Trade (-1,600).  The concentration of job losses in consumer-related sectors suggests that firms are not scaling up holiday employment as much as in previous years.

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

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

As presented during our Arkansas Economic Forecast Presentation, information from the Quarterly Census of Employment and Wages suggests that the nonfarm payroll data will ultimately be revised downward for the period from 2014:Q2 through 2015:Q1.  Final revisions will not be completed until March 2017 and will include additional data from 2015.   Currently, the total magnitude of the revision is estimated to be approximately 4,800 jobs (about 0.4%), with the revisions concentrated in the second half of 2015.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics and the Institute for Economic Advancement

The table below breaks down the expected revisions by sector.  Employment in goods producing sectors is expected to be revised upward, while service-sector job growth will generally be revised lower (with the exception of Financial Services).  Overall job growth for the period December 2014 through October 2016 is presently estimated to be 31,200 (2.6%), but our projections of future data revisions indicate that growth rate for that period will total 26,400 jobs (2.2%).

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics and the Institute for Economic Advancement

Arkansas Economic Forecast Presentation

By , November 16, 2016 2:06 PM

Little Rock Regional Economic Briefing

Thank you to all who attended this morning’s Regional Economic Briefing, where I presented my annual forecast for the Arkansas economy.  Special thanks to the Little Rock Branch of the Federal Reserve Bank of St. Louis for co-sponsoring the event.

Below are links to the presentations:

Kevin Kliesen:  National Economic Conditions

Charles Gascon:   Startups, STEM Jobs and the Tech Sector

Michael Pakko:  The Arkansas Economic Outlook

Arkansas Home Sales – September 2016

By , November 11, 2016 3:19 PM

According to newly released data from the Arkansas Realtors® Association, home sales across the state totaled 3,010 in September — up 6.5% from September of 2015.  This increase comes on the heels of a year-over-year increase of 15.2% in August.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

With the peak summer months now behind us, it is now inevitable that home sales growth will be significantly positive for the fourth consecutive year.  For the first three quarters of 2016, home sales 6.5% higher than the same period a year earlier.  As shown in the figure below, seasonally-adjusted home sales have been following a clear upward trend since late 2012, and are on track to make 2016 the highest sales volume since before the housing market collapse in 2007.

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

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

2016 Arkansas Economic Forecast Presentation

By , November 7, 2016 4:31 PM

Dr. Michael Pakko will present his annual forecast for the state’s economy on the morning of Wednesday, November 16 at a Little Rock Regional Economic Briefing, hosted jointly by The Little Rock Branch of the Federal Reserve Bank of St. Louis and the Institute for Economic Advancement at the University of Arkansas at Little Rock

The briefing will include:

  • Kevin Kliesen, St. Louis Fed research officer and business economist, will discuss national conditions.
  • Charles Gascon, St. Louis Fed regional economist, will give an overview of the state of the Arkansas economy.
  • Michael Pakko, chief economist and state economic forecaster with the institute, will provide the Arkansas forecast.
Date:  Wednesday, Nov. 16, 2016
Time:  7:30-8 a.m. | Breakfast
8-9:45 a.m. | Program
Location: Clinton Presidential Center
Great Hall
1200 President Clinton Ave.
Little Rock, Ark. 72201

Registration is free; however, registration is required by Friday November 11.
Register here:  https://www.stlouisfed.org/events/2016/11/LRK-REB1116

Little Rock Regional Economic Briefing

Metro Area Employment and Unemployment – September 2016

By , November 2, 2016 3:40 PM

Unemployment rates increased in all of Arkansas’ metropolitan areas in September.  Seasonally adjusted estimates showed increases of 0.2 percentage points in six of Arkansas’ metro areas, with the rate increasing by 0.3 in Pine Bluff and only 0.1 in Texarkana.  The statewide unemployment rate rose by 0.1 percentage points for the month.

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

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

Unemployment rates remain consistently lower than a year ago, but have given up some of the gains achieved during the summer and are presently at levels comparable to the early months of 2016.

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

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

Payroll Employment
Changes in Nonfarm Payroll Employment in September were mixed.  Hot Springs and Jonesboro both showed solid employment gains for the month.  However, employment was down in Fayetteville, Little Rock, Memphis and Pine Bluff.  Employment was essentially unchanged in Fort Smith and Texarkana.

Source: Bureau of Labor Statistics, Current Employment Statistics

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

Over the past 12 months, employment has increased across most of the state, but has declined in Pine Bluff and Texarkana.  Employment has been slow to recover from the 2008-09 recession in many parts of Arkansas.  Only Fayetteville and Jonesboro have shown significant employment increases since December 2007, with the Little Rock metro area up slightly compared to pre-recession levels.  Employment in Pine Bluff is down by 13% from 2007, having fallen 10.5% since employment in other parts of the state reached post-recession lows.

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

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

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