Institute for Economic Advancement

Arkansas Personal Income – 2016:Q4

By , March 28, 2017 4:46 PM

Arkansas personal income increased by 0.8% in the fourth quarter of 2016, a slightly slower pace than the nationwide growth rate of 0.9%.  From the fourth quarter of 2015 through the end of 2016, income growth in Arkansas was 3.2%, compared to 3.7% nationwide.  Since the beginning of 2010, incomes in Arkansas have been rising at a 4.1% annual rate, slightly below the 4.3% U.S. pace.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Annual Data
The personal income report from the Bureau of Economic Analysis featured data based on 2016 annual averages.  From 2015 to 2016, personal income in Arkansas grew at a 3.2% rate — a growth rate that ranked 27th among the 50 states.  Across the country, growth rates ranged from -1.7% in Wyoming to 5.9% in Nevada.

PI-2016Q4-map

Total earnings by place of work expanded at nearly identical rates in Arkansas and the U.S. in 2016 — 4.05% and 4.06%, respectively.  The table below reports a breakdown of earnings by industry.  For both Arkansas and the nation, the sector contributing the most to earnings growth was Health care and social assistance.  Several other service sectors showed relatively strong growth as well.  The weakest sector for earnings growth was Mining — reflecting the ongoing slump in fossil fuel prices and extraction activity.  A surprisingly strong sector was Construction, which grew at a 7.3% nationwide and 5.2% in Arkansas.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Per Capita Income
With a population growth rate of 0.3 from 2015:Q5 to 2016:Q4, personal income per capita in Arkansas grew at a 2.9% rate.  U.S. population growth over the same period was 0.7%, resulting in a per capita income growth rate of 3.0%.  In the fourth quarter of 2016, U.S. per capita income stood at $50,207, while Arkansas’ was $39,725.  As a percent of the U.S., Arkansas’ per capita income ended the year at 79.1%, down slightly on net from a year earlier.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

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Arkansas Employment and Unemployment – February 2017

By , March 27, 2017 1:23 PM

The February state employment report from the Bureau of Labor Statistics was a strong report for Arkansas overall.  The headline statistic was another decline in the state’s unemployment rate, down to 3.7%.  That represents a new record low for Arkansas’ unemployment rate, and is one full percentage point lower than the U.S. unemployment rate for February.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The underlying data from the household survey showed that the number of unemployed Arkansans declined by over one thousand, while the number employed rose nearly 2,500.  After drifting downward for the past 10 months, the labor force increased by 1,346 in February.

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

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

With the Arkansas unemployment rate hitting new record lows, it is useful to note that changes in labor force participation rates have complicated the interpretation of the unemployment statistics.  When the state’s unemployment rate was at a cyclical low of around 5% before the 2008-09 recession, the labor force participation rate in Arkansas was as high as 64%.  The participation rate has fallen sharply since that time and is currently near 58%.  That is, the fraction of the state’s population that is employed or even looking for work now has fallen by around 5-6% over the past decade.  If the workers how have dropped out of the labor force were to be considered officially “unemployed,” the current unemployment rate would be approximately 12%.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm payroll employment rose sharply in February, up by 6,100 (seasonally adjusted*).  The percentage increase for the month (o.5%) was the second-fastest growth rate in the nation (Montana and Nebraska saw increases of 0.6%).  Moreover, the employment total for January was revised upward by nearly 2,000 jobs.

Job growth was distributed across a wide range of sectors.  Goods-producing sectors, in particular, had a very strong month, with Mining and Logging, Construction and Manufacturing all posting gains.  On the service-providing side, Professional & Business Services and Education & Health Services continued to expand at a healthy pace.

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

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

Over the past 12 months, Arkansas payrolls have expanded by 16,300 — a growth pace of about 1.3%.  Over the same period, U.S. job growth has been around 1.6%.

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.

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Metro Area Employment and Unemployment – January 2017

By , March 20, 2017 4:42 PM

The latest release on metro area unemployment rates included only selected data:  Revisions to historical data and seasonal factors are in progress and will be included in next month’s report.  For now, only the not-seasonally adjusted data are available.  As shown in the following figure, unemployment rates vary considerably across Arkansas metro areas.  Fayetteville, Jonesboro, and Little Rock have unemployment rates below the statewide average of 4.2%, while the remaining metro areas have rates that are above the average.

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

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

From January 2016 to January 2017, unemployment rates declined sharply in most of the state’s metro areas, with the statewide rate declining by one-half of a percentage point.  Two exceptions were Memphis and Texarkana, which experienced increases in unemployment rates over the 12-month period.

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

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

Payroll Employment
Changes in nonfarm payroll employment were mixed across metro areas.  One-month changes ranged from Hot Springs (+1.6%) to Fort Smith (-1.4%).  Compared to January 2016, employment was higher in five of the eight metro areas, but was lower in Fort Smith and Texarkana.

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

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

The latest report included annual benchmark revisions to the payroll employment time series.  The underlying not-seasonally adjusted data were revised back to April of 2015, with seasonal factors revised back five years.  The revisions are summarized in the table below and displayed in the accompanying set of charts.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

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Arkansas Employment and Unemployment – January 2017

By , March 13, 2017 6:05 PM

Today’s state employment report featured a new record low unemployment rate for Arkansas, 3.8%.  Previously published figures had shown a 3.8% unemployment rate back in May of 2016, but recent data revisions eliminated that transitory dip in the data.  With the latest downtick, Arkansas’ unemployment rate in January was a full percentage point lower than the national average.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Underlying the unemployment rate itself, the number of unemployed dropped by 2,098 in January, while the number of employed increased by 823.  On net, therefore, the labor force contracted by 1,275 for the month.

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 declined by 4,300 in January.  In a reversal of typical patterns, goods-producing sectors added jobs in January, while service-providing sectors shed jobs during the month.  Construction and Manufacturing showed increases of 300 and 700 workers, respectively.  Meanwhile, employment in service-providing sectors was down by 5,300.  The declines were broadly based, with sectors losing jobs including Wholesale Trade, Transportation and Utilities, Information Services, Professional and Business Services, and Leisure and Hospitality.

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

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

Compared to a year ago, total employment is up by 11,300.  After data revisions (see below), growth in Manufacturing employment is looking more healthy, up by 2,300 over the past 12 months.  The bulk of job growth is taking place in key service sectors, Education and Health Services up 6,800, Professional and business services up 300, and Other Services up 2,100.

Revisions to Payroll Data
Today’s report included the annual benchmark revisions to the payroll data.  Data from the Quarterly Census of Employment and Wages (QCEW), which is more complete and accurate than the monthly payroll employment statistics, had led us to expect a modest downward revision to total employment levels for the state.  However, the revised data revealed a small upward adjustment, amounting to about 800 jobs.  After revision, total payroll employment shows a growth rate of 1.2% from December 2015 through December 2016 (up from an original estimate of 0.4%).  Growth for the previous year was revised downward slightly from 2.3% to 2.0%.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Revisions to the not-seasonally adjusted data covered the period March 2015 through December 2016.  Although there are small changes in the data for previous periods, these are only minor adjustments to seasonal factors.  Hence, the economically significant revisions are limited to the last two years.  The table below summarizes the impact of the revisions by sector, reporting on the change in the level of employment by sector as of December 2016, and comparing the pre-revision to post-revision growth rates for the two-year period December 2014 to December 2016.

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.

 

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Revised Unemployment Rates for Arkansas

By , February 28, 2017 4:24 PM

The Bureau of Labor Statistics has completed its annual review and revision of Local Area Unemployment Statistics (LAUS) for 2012-2016.   The data revisions incorporate updated population controls from the U.S. Census Bureau, revisions from other original data sources, and model re-estimation.

For Arkansas, the revisions were not surprising.   The originally published data showed a sharp increase in household employment over the first three months of 2016 — a reading about which we were very skeptical from the outset.   After revision, the unprecedented surge in employment and labor force was eliminated completely.  The new data show more robust growth in employment over most of 2015 and a much smaller upswing/downswing during 2016.  The new data also show that the number of unemployed was lower than previously reported for much of 2015, with a smaller decline in the number of unemployed during the first part of 2016.

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

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

As a result of the revisions, Arkansas’ unemployment rate now shows a more rapid decline during 2015, followed by a more stable rate during 2016.  The original data had indicated that the Arkansas unemployment rate declined to as low as 3.8% in May 2016, drifting back up to 4.0% toward the end of the year.  After revision, the unemployment rate changed little over the year, starting at 4.1% then dropping to 4.0% for most of the rest of the year.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Today’s data revisions also included the official annual averages for unemployment.  The report noted at least three distinctions for Arkansas:

1.  From 2015 to 2016 (annual averages), the Arkansas unemployment rate declined 1.1%, from 5.1% to 4.0%.  Massachusetts and South Carolina were the only states to show a larger decline (-1.2%).

2.  For the year, Arkansas unemployment rate of 4.0% can be considered statistically significantly lower than the U.S. average of 4.9%.

3.  Arkansas was one of only 14 states to show a statistically significant increase in the employment-population ratio (up 0.7 percentage points, from 55.1% to 55.8%)

 

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Arkansas Taxable Sales – 2016

By , February 13, 2017 4:25 PM

Arkansas Taxable Sales (ATS) increased 0.4% in the fourth quarter of 2016 (seasonally adjusted), and were up 1.8% from a year earlier.

With gasoline prices little changed, an increase in gallons sold pushed gasoline expenditures up 9.9% for the quarter.  As a result, Arkansas Taxable Sales Including Gasoline (ATSIG) rose 0.9%.  Compared to the fourth quarter of 2015, ATSIG was up 2.2%.

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

Both ATS and ATSIG had declined over the first half of 2016, but recovered lost ground in the third and fourth quarters.  On average, 2016 was a year of slowing growth in taxable sales.  Not including gasoline, Arkansas Taxable Sales were up 1.5% for the year.  With gasoline prices down from $2.18 in 2015 to $1.91 in 2016, expenditures on gasoline were down 8.2%.  Consequently, ATSIG rose only 1.0% for the year.

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

# # #

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:Q4 (Excel file).

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Arkansas Home Sales – December 2016

By , February 7, 2017 1:48 PM

The Arkansas Realtors® Association has released home sales information for December 2016, completing the data for calendar year 2016.  Sales for the month totaled 2,731, up 8.3% from the previous December.  Total sales for the year were 34,033, up 8.1% from 2015.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The rising trend in home sales has now run more than four full years.  As shown in the chart below, quarterly seasonally-adjusted data display robust growth since at least the beginning of 2013.  Seasonally adjusted sales in the fourth quarter of 2016 were 8,870, breaking through the pre-recession sales level of approximately 8,500/quarter.

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

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

Last November, our forecast for home sales in 2016 was 33,600, so the final figures for the year slightly outpaced expectations.  Sales in 2017 are expected to continue their robust growth, with our forecast calling for over 36,000 home sales and a year-over-year growth rate of 8.4%.  This outlook is conditioned on a continued slow pace of rising interest rates.  If the Federal Reserve raises rates more aggressively than presently expected, a slowdown in home sales might take hold before the end of 2017.

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Arkansas GDP – 2016:Q3

By , February 2, 2017 3:35 PM

The Bureau of Economic Analysis announced this morning that Arkansas real GDP grew at a 2.3% annual rate in the third quarter of 2016.  While this growth rate is roughly in line with prevailing trends, Arkansas’ growth lagged behind the nationwide rate of 3.5%, ranking #41 among the 50 states.

GDP-map-2016Q3

Over the past four quarters, Arkansas’ growth rate has averaged 2.1%, compared to 1.6% for the entire U.S.

Source: U.S. Bureau of Economic Analysis

Source: U.S. Bureau of Economic Analysis

As shown in the table below, the patterns of growth rates across sectors are quite similar for Arkansas and the U.S.  Growth was relatively strong in Utilities, Finance and Insurance, and Administrative services.  Another sector to show encouraging growth was Durable Goods Manufacturing.  Arkansas’ agricultural output contracted in the third quarter; however, agricultural output shows substantial volatility from quarter to quarter.  Output in the mining sector was down across the board, reflecting continued weakness in oil and gas prices.

Source:  U.S. Bureau of Economic Analysis

Source: U.S. Bureau of Economic Analysis

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Metro Area Employment and Unemployment – December 2016

By , February 1, 2017 3:47 PM

Unemployment rates in Arkansas metro areas were generally lower in December than in November.  Although the raw not-seasonally adjusted figures show increases in all eight metro areas that include parts of Arkansas, the end of year is typically associated with seasonal upticks in unemployment associated with academic breaks.  After seasonal adjustment, unemployment rates declined Fayetteville, Fort Smith, Jonesboro and Pine Bluff.  Seasonally adjusted unemployment rates were unchanged in Hot Springs and Little Rock, while increasing slightly in Memphis and Texarkana.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Compared to year earlier, Decembers metro unemployment rates continued to show significant declines.  From December 2015 through December 2016, unemployment rates declined by 0.1% (Texarkana) to 1.2% (Pine Bluff).

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
Nonfarm Payroll Employment in December was up 0.7% in Jonesboro and 0.4% in Fort Smith, but was lower in 5 of the state’s metro areas.  Compared to December 2015 employment was higher in most metro areas, with particularly large gains in Jonesboro.  Tow metro areas, Pine Bluff and Texarkana showed year-over-year declines in employment.  Those two metro areas also showed longer-term declines, with employment lower than the post-recession trough point of February 2010.  Five of the state’s eight metro areas have yet to reach pre-recession (December 2007) employment levels.  Eight years after the onset of the 2008-09 recession, only Little Rock, Fayetteville and Jonesboro have shown net gains.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

 

 

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Arkansas Employment and Unemployment – December 2016

By , January 24, 2017 12:46 PM

As reported last Friday by the Arkansas Department of Workforce Services, Arkansas’ unemployment rate declined one-tenth of a percentage point to 3.9% in December.  This morning, the U.S. Bureau of Labor Statistics released additional details.  From the household survey data, the number of unemployed Arkansans declined by 1,345.  However, the number of employed declined by 5,357, the 7th consecutive monthly decline in employment.  It was also the 7th consecutive decline in the size of the active labor force (-6,702).

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 increased by 1,700 in December (seasonally adjusted).  Sectors showing monthly increases included Leisure and Hospitality services (+1,200), Wholesale Trade (+1,100) and Education and Health Services (+1,200).  Both Construction and Manufacturing showed losses for the month, and remain below the levels of December 2015.

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

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

Overall, the current data indicate that payroll employment rose 5,200 from December 2015 through December 2016, a gain of only 0.4%.  The 2016 year-over-year gain compares to an increase of 27,100 (2.3%) in 2015.  However, these totals will be revised in the next report from the BLS, scheduled to be released on March 13th.

Using available data from the Quarterly Census of Employment and Wages (QCEW), we anticipate that the payroll employment totals will be revised downward for the period from September 2015 forward.  These estimates suggest that the employment increase in 2015 will be revised downward to show a gain of only 16,000 jobs (1.3%), while the change from December 2015 through December 2016 will end up indicating an increase of 6,800 jobs (0.6%).

Sources:  Bureau of Labor Statistics, Institute for Economic Advancement

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

# # #

*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.

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