Arkansas GDP – 2018:Q3

By , February 26, 2019 2:16 PM

State-level GDP data, released this morning by the Bureau of Economic Analysis, showed Arkansas’ growth rate was 1.9% (annual rate) in the third quarter of 2018.  GDP was unchanged or higher in all 50 states, with growth rates ranging from 5.8% in Washington to 0.0% in West Virginia.  The national average growth rate for the quarter was 3.4%.  Arkansas’ 1.9% growth rate ranked 46th among the 50 states.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The third quarter expansion marks the fourth consecutive quarter of positive GDP growth in Arkansas.  Consequently, Arkansas growth rate on a year-over-year basis has accelerated to 2.8%, just shy of the national average growth rate of 3.0%.  Based on four-quarter growth rates, Arkansas ranked #16 among the 50 states.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The breakdown of growth by sector for the third quarter shows that Arkansas’ growth followed similar patterns to the nationwide trends.  The largest positive contributions to growth came from Wholesale Trade, Retail Trade, and Finance & Insurance.  Arkansas also saw significant positive contributions from Management of companies and enterprises and Administrative and waste management services.  Sectors subtracting from growth included Agriculture, forestry, fishing and hunting; as well as Mining and Utilities.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The next release for state GDP growth, covering the fourth quarter of 2018 and annual averages of the year, is scheduled for May 1.

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Arkansas Taxable Sales – 2018:Q4

By , February 25, 2019 1:05 PM

Arkansas Taxable Sales (ATS) increased 1.8% in the fourth quarter of 2018 and was 1.0% higher than the same quarter a year earlier.  The growth rate of ATS in 2018 represents a slowdown from the previous trend rate:  From 2014 through 2017, ATS expanded at a 3.1% annual rate.

Over the entire calendar-year 2018, ATS totaled $59.848 billion, up 2.5% from 2017.

Sources: Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute.

Sources: Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute.

Sources: Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute.

Sources: Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute.

Gasoline prices were trending downward during the fourth quarter.  The average price of gasoline was $2.31, down from $2.59 in the third quarter.  As a result, consumer expenditures on gasoline are estimated to have fallen by 12.0% in 2018:Q4.  Incorporating this spending category, Arkansas Taxable Sales Including Gasoline (ATSIG) increased by only 1.4% in the fourth quarter.  Total spending, including gasoline, was 1.1% higher than in the fourth quarter of 2017.

# # #

Arkansas Taxable Sales (ATS) is calculated by the Arkansas Economic Development Institute 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 2018:Q4 (Excel file).

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Metro Area Employment & Unemployment – December 2018

By , January 30, 2019 4:25 PM

The final metro area employment report for 2018 came out this morning.  In December, unemployment rates among Arkansas metro areas showed a mix of changes.  From November to December, seasonally adjusted data showed unemployment rate declines on four metro areas (Hot Springs, Jonesboro, Memphis and Pine Bluff).  Fort Smith, Little Rock and Texarkana saw upticks in unemployment, while the rate was unchanged in Northwest Arkansas.  Compared to a year earlier, not-seasonally adjusted data indicate that rates are unchanged to up slightly, with the exception being Fort Smith’s 0.5% decline.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The figure below illustrates the recent paths of metro unemployment rates.  Across the state, unemployment rates showed declines during the late spring and summer, reversing those changes during the latter months of the year.  (Memphis is an exception, showing nearly the reverse pattern.)  This short term fluctuations are typically smoothed out when the data go through the annual revision process.  We’ll find out the results of those revisions on February 28.

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

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

Payroll Employment
Nonfarm payrolls showed employment declines for most of Arkansas’ metro areas in December.  Little Rock was the only metro to experience a month-to-month employment increase, with Fayetteville and Pine Bluff essentially unchanged.  Compared to December 2017, employment was up in all metro areas except for Pine Bluff (-0.9%).  The largest year-over-year increases were for Jonesboro (2.4%) and Fayetteville (2.3%).

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

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

Employment growth in 2018 was generally consistent with the trends that have prevailed in recent years.  Fayetteville and Jonesboro are clearly the fastest-growing metro areas in the state, with Little Rock and Memphis growing at a somewhat slower pace.  Since February 2010, when employment reached a low point both statewide and nationally, total employment has changed very little in Fort Smith, Texarkana and Hot Springs.  Pine Bluff has experienced a cumulative 12.6% decline over that time.  Compared to the pre-recession employment peak (December 2007), employment has still not fully recovered in Fort Smith, Hot Springs, Pine Bluff and Texarkana.

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

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

The payroll data will also be revised before we get another current reading on the metro area employment situation.  The annual “benchmark” revisions can sometimes be substantial, especially for metro areas.  The revised data will not be available until mid-March.  We will revisit the metro area employment statistics for 2018 after those revisions are released.

 

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Arkansas Employment and Unemployment – December 2018

By , January 18, 2019 12:37 PM

The Arkansas unemployment rate held steady in December at 3.6% after having registered a 0.1% uptick in November.  The national unemployment rate rose from 3.7% to 3.9% in December.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

For the third consecutive month, the underlying components of the unemployment rate showed an increase in both the number of employed and the number of unemployed, implying an expanding labor force.  For the period September through December, the household survey shows an employment increase of 2,843 and an unemployment increase of 1,881.  Consequently, the labor force participation rate increased in December from 57.4% to 57.5%.  As is often the case, this increase in labor force participation is mathematically associated with a higher unemployment rate (manifested in the November uptick), but is not an unambiguously negative development.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics

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

Payroll Survey
Nonfarm payroll employment increased by 1,800 in December (seasonally adjusted), and the figure for November was also revised upward by 200 jobs compared to last month’s report.  As a result, Arkansas payroll employment ended the year with 17,100 more jobs than at the end of 2017 — a growth rate of 1.4%.  Over the same period, U.S. employment growth expanded by 1.8%.

Source: Bureau of Labor Statistics

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

Throughout much of the current economic expansion, job growth has been almost entirely concentrated in service-providing sectors.  In recent months, however, goods-producing sectors have been making a comeback.  Manufacturing ended the year with an increase of 3,800 jobs (+2.4%), with gains in both durable and nondurable-goods manufacturing.  With the construction sector also adding 1,900 jobs, good-producing sectors accounted for over 5% of the state’s job growth in 2018.  In December alone, good producing sectors accounted for over 90% of total employment growth, with service-providing sectors adding only 100 net new jobs for the month.  Job losses were reported for Transportation & Utilities, Financial Services, and Leisure & Hospitality Services.  Professional & Business services continued to expand, with employment up 500 for the month and up 4,800 since December 2007.

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

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

Today’s report is the last monthly update before the annual revisions to the data are announced.  Updated estimates of household employment and the unemployment rate will be released on February 28, and the “benchmark revision” to payroll employment will be unveiled on March 11.

# # #

 *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.

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Metro Area Employment and Unemployment – October 2018

By , November 29, 2018 3:50 PM

Indications of a slightly weaker labor market statewide were also reflected in metro area employment statistics for October.  According to this morning’s report from the Bureau of Labor Statistics, only 95 of 388 metro areas registered unemployment rates higher than a year ago.  In Arkansas, six of eight metro areas were in that group.  Seasonally adjusted data showed monthly increases in unemployment rates for six Arkansas metros as well.  Underlying the changes in unemployment rates, the number of unemployed individuals increased in all eight Arkansas metro areas.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Unemployment rates remain at historic low levels, particularly in the Fayetteville, Jonesboro, and Little Rock.  In other areas of the state, unemployment remains elevated.  In both Pine Bluff and Texarkana, rates have crept back above 5%.    As shown in the figure below, however, recent increases in unemployment rates generally reflect reversals of the declines we saw earlier in the year.  These types of transitory fluctuation are often smoothed away when the data are revised, so we might expect to see metro unemployment rates appear more stable after the January 2019 revisions are completed.

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 Arkansas metro areas.  Statewide employment declined slightly in October, but the job losses appeared to be concentrated in three metro areas:  Little Rock, Pine Bluff, and Texarkana.  Payrolls continued to grow in both the Northeast and Northwest regions of the state.  Over the past 12 months, employment has increased in all of Arkansas’ metro areas except Pine Bluff, where employment declines continue to accumulate.  Growth in Northwest Arkansas appears to have slowed somewhat, with percentage increases in Jonesboro, Memphis and Little Rock exceeding the growth rate in the Fayetteville-Springdale-Rogers metro area.

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

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

 

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Arkansas Employment and Unemployment – October 2018

By , November 16, 2018 11:43 AM

There is little to cheer about in the latest report on Arkansas employment and unemployment.  The headline sounds fine: the state’s unemployment rate remained at the low level of 3.5% — slightly lower than the national unemployment rate of 3.7% (though the difference is not statistically significant).

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

However, changes in the statistics underlying the latest reading on the unemployment rate were not unambiguously positive.  Household employment ticked up a bit (+670) but is still down more than 8,000 from a year ago.  The number of unemployed had been declining for five consecutive months but increased slightly in October (+211).  As a result of these increases, the labor force expanded by 881, but is down 11,000 from a year ago.  The state’s labor force participation rate was unchanged at 55.4%, down 0.9% from October 2017.

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 1,200 in October, and the September employment figure was revised down by 200.  Compared to October 2017, Arkansas employment up 8,400, about 0.7%.  Over the same 12 months, U.S. employment has increased 1.7%.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The October decline in payrolls corresponded to job-losses in Retail Trade, Financial Services, Other Services, Mining & Logging, and Manufacturing.  Gains in other sectors were generally small, and the high-growth sector of Professional & Business Services stalled in October.  Although total job growth over the past 12 months has slowed, year-over-year gains in goods-producing sectors remain encouraging and growth in Professional & Business Services and Education & Health services continue to drive overall employment higher.

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

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

Although the granules of good news in the October employment report are rare, we always caution that a single month of data should not be overemphasized.  Unemployment remains low and payroll employment continues to rise (albeit at a slowing pace).  There’s no reason to expect those fundamentals to change.  We will continue to monitor monthly changes, with particular interest on how the annual data revisions due in early 2019 will affect our view of recent labor market developments in Arkansas.

# # #

 *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.

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Arkansas GDP – 2018:Q2

By , November 14, 2018 2:29 PM

The Bureau of Economic Analysis announced this morning that the recent acceleration in national GDP growth was reflected second quarter statistics for the 50 states:  Growth rates ranged from 2.5% in Delaware to 6.0% in Texas.  Arkansas’ growth rate was 4.4% — the tenth-highest growth rate in the nation.  As part of a comprehensive revision of the state GDP data (more below), Arkansas first quarter growth rate was also revised up from 0.0% to 2.0%.  From 2017:Q2 to 2018:Q2, Arkansas GDP growth has been 1.7%, compared to 2.9% for the U.S.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Agriculture was by far the largest contributor to Arkansas’ GDP growth, accounting for 1.27 percentage points of the state’s 4.4% growth rate.  Other sectors adding significantly to growth included Real estate, Information and Utilities.  Durable goods manufacturing was also a notable area of strength for both Arkansas and the U.S.  The only negative contributors to Arkansas growth were Finance and insurance, Retail trade and Nondurable goods manufacturing.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Comprehensive Data Revisions:
This morning’s data release incorporated the results of the BEA’s comprehensive update of GDP by state, incorporation more complete and detailed source data than was previously available.  The base year for price adjustment was also changed from 2009 to 2012.  For Arkansas, the revisions had the effect of lowering the level of GDP estimates for much of the past decade.  The revised data show a somewhat sharper downturn during the “Great Recession” of 2008-09, and also show sharply slower growth over the period 2013 through 2017.  From 2013:Q1 through 2017:Q4 the revised data show a growth rate of 0.5% compared to 1.0% in the previously published data (annual rates).

Source: Bureau of Economic Analysis.  Note - Previously published data have been converted from a 2009 base year to 2012.

Source: Bureau of Economic Analysis. Note – Previously published data have been converted from the 2009 base year to the new benchmark of 2012.

For more recent periods, the data revisions mark something of an improvement.  Quarterly growth rates for Arkansas were revised up from 0.0% to 2.0% for the first quarter of 2018, and up from 2.5% to 2.7% for the fourth quarter of 2017.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Although the newly-revised data give cause for reassessing the strength of Arkansas’ economic expansion over the past several years, the latest readings provide reason to be optimistic that the recent pick-up in GDP growth nationwide is also being enjoyed here in Arkansas.

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Metro Area Employment and Unemployment – September 2018

By , November 6, 2018 2:21 PM

September data from the Bureau of Labor Statistics reveals an unusual pattern of unemployment rate changes: While the statewide average declined 0.1 percentage points from August to September, metro area unemployment rates rose slightly (with the exception of Fort Smith, unchanged).  This might indicate an improvement in the non-metropolitan regions of the state, but is more likely an artifact of monthly “noise” in the data and/or differences in the state and metro seasonal adjustment methodologies.  Changes over the previous twelve months (not-seasonally adjusted data) are more consistent, with five metro areas matching or exceeding the 0.2 percentage point decline statewide.  Rates in Memphis and Texarkana were higher compared to a year ago.  In fact, Texarkana earned the dubious distinction of experiencing the largest year-over-year increase in the nation.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The figure below compares the seasonally adjusted metro area unemployment rates with the statewide average.  The eight areas have sorted into three broad categories:  The relatively rapid-growing metros of Fayetteville, Jonesboro and Little Rock have unemployment rates lower than the statewide average; Fort Smith and Hot Springs are slightly higher than the statewide average (though not significantly so) while Memphis, Pine Bluff and Texarkana have the highest unemployment rates in the state — well above the statewide average.

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

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

Payroll Employment
From August to September, nonfarm payroll employment rose sharply in Fayetteville, Hot Springs, Jonesboro, Little Rock, and Memphis.  Pine Bluff and Texarkana were unchanged, while Fort Smith suffered a 0.4% contraction.  Over the past twelve months, both Fort Smith and Pine Bluff have declined, and indeed, employment in both metros remain lower than the cyclical trough of February 2010.

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

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

As shown in the final column of the table above and illustrated using quarterly averages in the chart below, only two metro areas have experienced robust employment growth over the past decade (Fayetteville and Jonesboro), while employment in Little Rock and Memphis is only slightly higher than at the previous cyclical peak.  Employment levels in Texarkana, Hot Springs and Fort Smith remain below pre-recession levels, as does Pine Bluff, which is down 15% from a decade ago.

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

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

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Arkansas Employment and Unemployment – September 2018

By , October 19, 2018 12:55 PM

The latest report on employment and unemployment in Arkansas included several positive indicators.  First, the unemployment rate declined once again, dropping to 3.5%.  The national unemployment rate also declined in September, so Arkansas’ rate remains only slightly lower than the U.S. average of 3.7% (and the difference is not statistically significant).

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The driving force behind recent declines in Arkansas’ unemployment rate is a rather sharp decline in the number of unemployed, which declined by 891 in September and has fallen by 4,400 since April.  Meanwhile, the household survey is also showing a decline in the number of employed Arkansans, down by 329 in September and down by over 9,000 over the past 12 months.  Accordingly, the labor force is contracting as well.

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

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

At 3.5%, the Arkansas unemployment rate is at an all-time low.  While the low number of workers seeking a job is certainly a positive indicator for the strength of the labor market, recent declines in the labor force participation rate complicate the interpretation of the unemployment rate.  With the labor force declining, the labor force participation rate is significantly lower than it was during the previous economic expansion, declining in September by another 0.1 percentage point to 57.4%.  That’s down almost a full percentage point from a year ago and down nearly 6% from a decade ago.  So while a smaller fraction of the labor force is actively seeking employment, the labor force itself comprises a much smaller share of the state’s population than it was the last time we experienced low unemployment.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
While the employment figures from the household survey continue to decline, the news from the payroll survey – which is generally considered a more accurate measure of job growth – is much more upbeat.  Nonfarm payroll employment expanded by 3,200 in September (seasonally adjusted).  The employment figure for August was revised upward by 1,600 as well, turning that month’s employment change from a preliminary decline of 900 jobs to a revised increase of 700 jobs.  Over the past 12 months, payroll employment is up by 13,200 jobs – approximately 1.1%.  Over the same period, nationwide employment growth was 1.7%.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

A breakdown by major sectors shows that the September increase was reflected both the goods-producing and service-providing sides of the economy:  Strong gains were registered in Education & Health Services, Professional & Business Services, Transportation & Utilities, and Wholesale Trade.  Construction and Manufacturing were both up for the month, adding to increases from earlier in the year.  The only sectors to show notable declines were Retail Trade and Other Services.  Over the past 12 months, Professional and Business Services is by far the largest contributor to job growth (+6,600 jobs), but a healthy gain of 2,800 jobs in Manufacturing also contributed to the overall increase, as did a 2,000-job increase in Transportation & Utilities.

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.

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Little Rock Regional Economic Briefing

By , October 15, 2018 12:28 PM

aedi-frb

 

 LITTLE ROCK REGIONAL ECONOMIC BRIEFING
NOVEMBER 9, 2018 | 7:30 a.m. – 10:30 a.m.
CLINTON PRESIDENTIAL CENTER

Join us as Chris Varvares of IHS Markit and Dr. Michael Pakko of the Arkansas Economic Development Institute (AEDI) provide updates on economic conditions and the outlook for the nation and the state. Hosts for the event are the Little Rock Branch of the Federal Reserve Bank of St. Louis and the Arkansas Economic Development Institute.

Varvares, co-head of U.S. economics at IHS Markit, an information and analytics firm, will present the national outlook. Pakko, chief economist and state economic forecaster with AEDI will present his annual forecast for the Arkansas economy.

A hot buffet breakfast will be served. The event is free, but register soon, because space is limited.

THE DEADLINE TO REGISTER IS NOVEMBER 5!

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