Arkansas GDP – 2019:Q1

By , July 25, 2019 1:19 PM

New data from the Bureau of Economic Analysis shows Arkansas GDP growth of 2.5% for the first quarter (seasonally adjusted annual rate).  This was the highest quarterly growth rate for Arkansas since 2016:Q4.  While this represents solid growth, it fell short of the national growth rate of 3.1% in the first quarter.  Today’s report on GDP by state showed growth rates ranging from a low of 1.2% in Hawaii to a high of 5.2% in West Virginia.  Arkansas’ growth rate ranked it number 38 among the 50 states.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Over the most recent four quarters, Arkansas GDP growth has grown 1.6%, compared to 3.2% nationwide.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

As detailed in the table below, Arkansas’ growth rate was adversely affected by a sharp decline in Agriculture, which subtracted 0.65% from the state’s overall economic growth.  Positive contributors to the Arkansas growth rate included Manufacturing (of both durable goods and nondurable goods), Retail Trade and Health Care.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Today’s data release contained no revisions of past data.  The next GDP update is scheduled for November 7, 2019, at which time revised data for 2014:Q1 through 2019:Q1 will be released.

Arkansas Employment and Unemployment – June 2019

By , July 19, 2019 1:35 PM

Arkansas’ unemployment rate declined by 0.1% in June, reaching an all-time low of 3.5%.  Meanwhile, the national unemployment rate ticked up 0.1% to 3.7%. The difference between the two rates remains statistically insignificant.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

June’s dip in the unemployment rate was primarily attributable to another month of fairly steep decline in the number of unemployed.  That number was down 1,208 for the month, and has fallen by 3,445 over the past three months.  Meanwhile, the number of employed was up by 1,949 in June, and has increased by 6,611 over the past three months.  Over the past 12 months, household employment has risen by 15,213, an increase of approximately 1.2%.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics

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

Payroll Employment
Arkansas nonfarm payrolls expanded by 1,400 in June (seasonally adjusted).  The not-seasonally adjusted figures released by the Arkansas Department of Workforce Services showed a decline of over 5,000 jobs, but those losses were concentrated in sectors where summertime cutbacks are ordinary and expected.  In particular, declines in Education Services and State and Local government were associated with summer break at schools and universities.  After adjusting for these seasonal factors, small declines were recorded in only a handful of sectors and were offset by gains elsewhere.  One sector showing particular strength was Leisure and Hospitality services, particularly in the area of Accommodation and Food Services.  This sector typically expands during the summer months, but last month’s growth exceeded the usual seasonal patterns.  Over the past 12 months, the Leisure and Hospitality supersector has been the largest single contributor to Arkansas’ job growth, adding nearly 5,000 of the 16,100 total net increase in payroll employment.

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

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

# # #

 *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 here:  Table-Seasonally Adjusted NFPE.

Metro Area Employment and Unemployment – May 2019

By , July 3, 2019 12:38 PM

Unemployment rates in Arkansas metro areas continued to drift lower in May.  From April to May, unemployment rates declined in six of Arkansas’ eight metro areas, with declines of 0.2% in Hot Springs and Texarkana.  Over the past three months, unemployment rates have declined in all metro areas except Memphis.

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

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

As shown in the figure below, recent declines have partly reflected a reversal of rate increases earlier in the year.  Nevertheless, unemployment remain are now at record lows in Fayetteville, Fort Smith, Hot Springs, Jonesboro, and Little Rock.

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

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

Payroll Employment
Monthly changes in nonfarm payroll employment were mixed in May.  Employment was up 0.3% in Hot Springs< Little Rock and Memphis, and down 0.3% in Pine Bluff.  Smaller increases were reported for Jonesboro, Little Rock, and Texarkana.  Over the past year, payroll employment growth has exceeded 1.0 percent in six of the state’s metro areas.  In Fort Smith, net employment growth has been essentially zero, while it is down 0.3% in Pine Bluff.    A similar pattern holds for longer-term trends as well: Since the current period of employment expansion began at the end of 2013, the only metro area that has continued to see negative job growth has been Pine Bluff.

Source: Bureau of Economic Analysis, Current Employment Statistics (CES)

Source: Bureau of Economic Analysis, Current Employment Statistics (CES)

Arkansas Personal Income – 2019:Q1

By , June 25, 2019 12:09 PM

Arkansas total personal income increased at an annual rate of 1.8% in the first quarter, well below the national growth rate of 3.4%.  Arkansas’ growth for the quarter ranked it as the 6th slowest-growing state in the nation.   First-quarter growth represented a sharp slowdown from the fourth-quarter growth rate of 6.8% (which was revised downward from the originally-reported 7.5% rate).  Over the past four quarters, Arkansas personal income has expanded by 3.5%, compared to an average U.S. growth rate of 3.8%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

A number of the slowest-growing states in the first quarter were midwestern states which (like Arkansas) suffered a quarter-to-quarter decline in farm income.  Arkansas farm income declined by 19% in the first quarter (a 58% annualized rate), contributing a negative 1.6 percentage points to the overall growth in income.  In part, the declines in farm incomes in the mid-west and mid-south are related to a temporary boost in the fourth quarter of 2018 from payments made under USDA’s Market Facilitation Program, which was implemented to assist farmers affected by tariffs and reduced exports.  Payments under this program began in the fourth quarter and extended into the first quarter of 2019, but at a slower pace.  Looking past the volatile quarter-to-quarter fluctuations, Arkansas farm incomes in the first quarter were up 3.9% from the same time a year earlier.

As shown in the table below, the general decline in Farm Income was reflected in the earnings breakdown by a sharp decline in Farm Proprietors’ income.  Another component that contributed to slower growth in the first quarter was a decline in Dividends, Interest, and Rent.  Today’s report from the Bureau of Economic Analysis noted that this component declined in all 50 states in the first quarter, after a pronounced surge in the fourth quarter.  It is not uncommon to see year-end spikes in dividend income (followed by first-quarter declines), especially when end-of-year changes in the tax code provide incentives for front-loading payments.  In this case, however, we are aware of no specific tax law changes that would account for this particular pattern.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

In contrast to the declines in Farm Income and Dividends, Interest, and Rent, Arkansas workers saw growth in wages, salaries and supplements that exceeded national growth rates.  Personal Current Transfer Receipts contributed to income growth on both the state and national levels.  According the the BEA, “The increase in transfer receipts was due to an increase in refundable tax credits (the child tax credit and the Affordable Care Act premium tax credit), and a 2.8 percent cost of living increase in Social Security benefits.”

A breakdown of earnings by industry shows some additional specific sources of income gains and losses.  For both the state and the nation, relatively strong earnings growth was seen in retail trade as well as other major service-providing sectors.  One area of relative strength for Arkansas was in manufacturing, where earnings growth contributed 0.24 percentage points to the state’s growth rate compared to only 0.03 percentage points for the U.S.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas Employment and Unemployment – May 2019

By , June 21, 2019 12:30 PM

Arkansas’ unemployment rate was unchanged at 3.6% in May.  The rate has now been below 4% for 35 consecutive months.  The components of the unemployment rate moved in favorable directions in May, with the number of employed up by 2,543 and the number of unemployed down by 1,133.  Over the past three months, household employment has risen by over 6,800 while unemployment has declined by more than 2,700.

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

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

Payroll Employment
Nonfarm payroll employment declined by 700 jobs in May (seasonally adjusted).   Nationwide, payroll employment increased by a relatively small increment in May (+75,000) and today’s report on state-level employment notes that Washington was the only state to see significant job growth for the month, and that payroll employment was “essentially unchanged in 49 states and the District of Columbia.”

As shown in the table below, several sectors of the Arkansas economy showed job declines in May.  Employment in goods-producing sectors was particularly disappointing with declines in both Construction and Manufacturing.  Employment in retail trade outpaced the typical seasonal increase for May, while Leisure and Hospitality Services expanded by less than the usual seasonal gain (hence a decline in seasonally-adjusted employment).  Professional and Business Services showed an increase of about 1,000 jobs, with most of the increase attributable to Administrative and Support Services.

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

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

Compared to a year earlier, total payroll employment is up by 12,500 jobs.  About 40% of that job growth has come from Manufacturing and Construction.  Other important sectors for year-over-year growth include Wholesale Trade and most of the other Service-providing sectors (particularly Leisure & Hospitality).

# # #

 *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 here:  Table-Seasonally Adjusted NFPE.

Metro Area Employment and Unemployment – April 2019

By , May 29, 2019 3:30 PM

Unemployment rates moved lower in most of Arkansas’ metro areas in April, augmenting declines from the previous month.  Rates were unchanged in Memphis and Pine Bluff, but declined in all other metro areas.  Compared to a year earlier, rates were lower in all eight metro areas, with declines ranging from -0.2 in Pine Bluff to -0.8 in Fort Smith.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

With recent declines, unemployment rates now range from a high of 5.2% in Pine Bluff to a low of 2.7% in the Fayetteville-Springdale-Rogers metropolitan area.

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

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

Payroll Employment
Nonfarm payroll employment changes were mixed in April.  Four metro areas saw increased from the previous month, but three experienced declines (with the largest being Pine Bluff, down 0.6%).  Employment was essentially unchanged in Memphis.  Over the past twelve months, employment has increased by more than 1.0% across most of the state, but has been flat in Fort Smith and Pine Bluff.

The table below presents a slightly modified view of payroll employment tracking that we have been following here on the Arkansas Economist:  Instead of measuring changes from the beginning of the current nationwide employment expansion (February 2010), the third column of the table reports cumulative employment growth since the present growth phase began in Arkansas, December 2013.*  Since that time, statewide employment growth has been a cumulative 8.3%.  Northwest Arkansas and Jonesboro are the only the two metro areas that have grown faster than the statewide average, but all of of Arkansas metro areas (except Pine Bluff) have experienced employment growth over the subsequent 5+ years.

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

# # #

*The selection of December 2013 as the start of the present employment expansion is not rigorously scientific, but it is consistent with other business-cycle patterns.  GDP and income data suggest that Arkansas experienced a modest local recession in 2012, with negative employment growth through the end of 2013.  As shown in the figure below, employment began to expand during 2014 and has continued at a relatively steady pace since then.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Regional Price Parities – 2017

By , May 23, 2019 5:20 PM

The Bureau of Economic Analysis came out with their latest figures on real personal income for states and metropolitan areas last week.  A distinctive feature of these “real” income estimates is that they are adjusted for changes in prices that reflect not only the national inflation rate, but differences in local and regional price levels as well.  The annual report on real incomes therefore provides an annual reminder that Arkansas’ low cost-of-living is a partial offset to our state’s relatively low income levels.  In the latest report, covering 2017, Arkansas was once again near the bottom of the list, with the second-lowest Regional Price Parity (RPP) in the nation.  Arkansas’ RPP of 86.5 means that prices are 13.5% below the national average.  The lowest RPP in 2017 was Mississippi (85.7) while the highest was Hawaii (118.5).

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

One of the key implications of the RPP statistics is that after adjustment for differences in the cost of living, Arkansas personal incomes are closer to the national average than simple dollar-value comparisons suggest.  As shown in the figure below, nominal (dollar-valued) income in Arkansas is more than $10,000 lower than the national average.  After accounting for price-level differences, the gap closes to less than $4,000 (in 2012 inflation-adjusted dollars).  In comparisons among the 50 states, Arkansas ranks #46 in nominal per capita income.  After adjusting for the cost of living, Arkansas ranks #39 .

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

As a percent of the nationwide average, Arkansas per capita income is approximately 80% of the U.S. in dollar terms, but is over 92% after adjustment for price differences.  Comparisons with the national average are boosted by relative-price adjustments in all parts of the state — some more than others.  In non-metropolitan areas of the state, nominal incomes are only 64% of the U.S. average while real incomes are 78%.  The overall figures for Arkansas’ metropolitan areas are 89% for nominal income and 101% for real income — after adjusting for price differences, the standard-of-living in Arkansas metro areas is actually higher than the national average.  Differences among metro areas are also significant.   Per capita personal income in Northwest Arkansas is above the U.S. average in both nominal and real terms, whereas Pine Bluff has nominal incomes that are only 64% of the U.S. in dollar terms and 78% after adjusting for prices.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The price indexes used to make these adjustments are broken down into three categories: Goods, Rents, and Other Services.  Arkansas prices in all categories are below the national average, but Rents are particularly low in Arkansas — especially in non-metropolitan areas of the state.

RPP2017-tab

Because the RPP statistics compare local prices to the nationwide average, it is possible to string together changes in RPPs along with changes in the U.S. overall price index to generate statistics on local price changes (loosely speaking, local inflation).  The figure below shows the annualized rates of price change over the 5-year period from 2012-2017.  The rates of price-level changes in Arkansas have generally been lower than the U.S. inflation rate of 1.2%.  The only exceptions are Hot Springs and Jonesboro, where local inflation rates have been approximately 1.3%.  The lowest rate of price-change in the state was in Pine Bluff, where annual local inflation has averaged only 0.6% per year.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Finally, the whole point of this exercise is to measure the growth rate of real, inflation-adjusted incomes.  In 2017, nominal per capita income growth was 3.3%, slightly below the national average rate of 3.6%.  But with slower growth in prices, more of Arkansas’ growth translates to real income gains:  After price adjustment, real per capita income growth in Arkansas was 2.3% compared to 1.9% for the U.S.  Among Arkansas’ metro areas, Hot Springs had the highest nominal growth rate (3.9%), but relatively rapid price increases (2.8%) diminished the purchasing power of those gains, resulting in real growth of only 1.1%.  Non-metropolitan regions of the state experienced smaller price increases than the metropolitan areas, yielding real per capita income growth of 3.3%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas Employment and Unemployment – April 2019

By , May 17, 2019 1:50 PM

The latest state employment report shows that the extended period of low unemployment and slow steady employment growth continues.  Arkansas’ unemployment rate ticked back down to 3.6% in April, matching the all-time record low set in the spring of 2017 and reattained last summer.  Recent changes in the unemployment rate, amounting to movements up or down by 0.1%, are generally not statistically significant.  The month-to-month news can best be summarized by noting that the unemployment rate remains below 4.0%, as it has been for nearly three years now.  The national unemployment rate declined from 3.8% to 3.6% in April, so the state and national rates remain indistinguishable.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The April report showed a decline of about 1,100 in the number of unemployed Arkansans, pushing the total back below 50,000.  The number of employed increased by 2,100, implying an increase in the labor force of approximately 1,000 people.  Over the past 12 months, the data from the household survey indicate an increase in Arkansas employment of approximately 10,700.

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

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

Payroll Data
Nonfarm payroll employment was reported up by 200 in April, a relatively small increase on top of a small upward revision to the March data (seasonally adjusted).  Goods-producing sectors accounted for all of April’s net job growth, with service-providing sectors unchanged overall.  Manufacturing employment was down 1,200 for the month.  Nevertheless, growth in manufacturing over the past 12 months still accounts for over a quarter of net job creation.  Wet weather this spring has constrained some construction activity, but construction employment was up by 1,400 jobs in April.

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

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

From April 2018 through April 2019, payroll employment has expanded by 13,400 – approximately 1.1%.  Over half of the increase is attributable to goods-producing sectors (manufacturing and construction).  Among service-providing sectors, most of the growth over the past year has come from Education & Health Services and Leisure & Hospitality Services, both up by 1,900 jobs.  Professional & Business Services, which had been the fastest-growing sector for most of the current economic expansion, appears to have leveled-off, with zero net growth over the past 12 months.

# # #

 *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 here:  Table-Seasonally Adjusted NFPE.

Metro Area Employment and Unemployment – March 2019

By , May 2, 2019 5:11 PM

The revisions to the Local Area Unemployment Statistics data for metro areas is finally complete and was released with yesterday’s metropolitan area employment report from the Bureau of Labor Statistics.  The revised time series for metro unemployment rates (seasonally adjusted) is shown in the figure below.  Revisions to the unemployment rates were minor and left the trends intact.  Rates have changed little over the past year, with Jonesboro and Memphis edging slightly lower and Pine Bluff and Texarkana experiencing modest increases.

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

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

The revisions to the household employment levels are of interest, if for no other reason than they reinforce the revisions to payroll employment that were released in March.  Total employment was revised upward in Fort Smith, Hot Springs, and Pine Bluff.  Other metro areas saw modest downward revisions.  Overall the data for a indicate rising employment trends for the first months of 2019, with the exception of Pine Bluff where household employment is showing little change.

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 were mixed across the state’s metro areas.  From February to March, statewide employment was essentially unchanged.  Meanwhile, three metros experienced employment increases of 0.3% and three saw declines of 0.3%.  Hot Springs and Little Rock were essentially unchanged.  Compared to a year ago, employment is higher in six metro areas, unchanged in Pine Bluff and down slightly in Fort Smith.

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

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

With the data smoothed by using quarterly averages, the figure below provides a summary of the employment growth trends among Arkansas’ metro areas.  Since the beginning of 2014, employment has been increasing in nearly all of the metropolitan regions of the state.  The exception is Pine Bluff, where payroll employment continues to stagnate or decline slightly.

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

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

 

 

Arkansas GDP – 2018:Q4

By , May 1, 2019 12:14 PM

The latest report on state GDP from the Bureau of Economic Analysis shows Arkansas growth rate in the fourth quarter was 1.5% (seasonally adjusted annual rate), well below the U.S. growth rate of 2.2%.  Benefiting from strong growth in oil and gas production, the fastest growing state was Texas at 6.6%.  Arkansas ranked as the 34th highest growth rate among the 50 states.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The fourth-quarter total for Arkansas was up 1.2% from a year earlier, compared to a year-over-year growth rate of 3.0% for the U.S.  Over the most recent five years, Arkansas GDP growth has averaged 0.9% while the U.S. growth rate has averaged 2.4%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

As is often the case, data revisions that came out with today’s report (for 2015 through 2018:Q3) are important for putting the most recent data into context.  For Arkansas, these revisions raised estimates of GDP growth in late 2016 and early 2017, but lowered growth estimates for more recent quarters.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Specifically, the revisions increased growth in the fourth quarter of 2016 from 3.3% to 4.3%, changed the first quarter of 2017 from negative to essentially zero, and raised the second quarter estimate as well (from 1.5% to 2.1%).  From 2017:Q4 forward, however, estimates of Arkansas GDP growth were all lowered.  A notable revision for 2018:Q2 reduced the state’s growth rate from 4.4% down to 1.7%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The table below shows a breakdown of contributions to growth by sector.  The largest single contributor to Arkansas’ growth rate in the fourth quarter was wholesale trade, but durable goods manufacturing had a strong showing as well.  Both are relatively large, important sectors in the Arkansas economy.  Other growing sectors included Real Estate; Management of companies and enterprises; and Health care and social assistance.  Oil and gas production also gave the Arkansas economy a boost, but that sector is not as large a contributor to our state’s economy as it is to other states in the region.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

One notable declining sector was Agriculture, which was down 8.7% from the previous quarter.  The contrast between this downturn in production and the surge in farm income that we saw in the fourth-quarter personal income report would seem to indicate that the income surge in agriculture was largely attributable to payments made to farmers as part of the USDA’s Market Facilitation Program, which is intended to assist farmers affected by tariffs and reduced exports.  Payments under this program began in the fourth quarter.  The USDA has recently noted that the program has paid out more than $8.3 billion to nearly 600,000 applicants.  Payments to soybean farmers have comprised a large share of the payouts, and should continue to boost farm incomes in the income data for the first quarter of 2019.

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