Institute for Economic Advancement

Economic Briefing/Forecast Conference

By , November 5, 2015 12:59 PM

Thank you to all the participants and attendees for this morning’s Economic Briefing, co-sponsored by the Institute for Economic Advancement and the Little Rock Branch of the Federal Reserve Bank of St. Louis.

Picture1

The links below contain copies of the presentation slides.

Kevin Kliesen’s  National Economic Outlook and  Charles Gascon’s analysis of  young adults living with their parents is available in a combined file:  LittleRock_REB_combined.pdf

Michael Pakko’s presentation of current economic conditions in Arkansas and forecasts for 2016 and 2017 is available here:  Pakko-Slides-2015.pdf

Greg Hamilton’s Update of the Little Rock Region Report card can be found here:  Little Rock Report Card

Print Friendly

Arkansas Employment and Unemployment – September 2015

By , October 20, 2015 11:32 AM

The state employment report that came out this morning contained mixed signals.  The good news was that the unemployment rate dropped by two-tenths of a percent to 5.2%.  The national unemployment rate remained steady at 5.1%, so the gap between Arkansas and the U.S. rates narrowed.  Earlier in the year, Arkansas’ unemployment rate had crept upward, reaching a peak of 5.8% in May.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

While the number of unemployed was down by over 2,500, the household data showed that number of employed was up only by about 1,000.  Consequently, the Arkansas labor force contracted for the second time in 3 months.

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

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

Payroll Data
The not-seasonally adjusted payroll data for September showed an increase of 12,300 jobs.  However, the gains were almost entirely seasonal.  Back-to-school effects boosted state and local government employment (public schools) and private sector employment in education.  Leisure and Hospitality and Retail Trade also showed seasonal declines.  After seasonal adjustment (shown in the table below), the data showed a slight decline in employment for the month (-700 jobs).    A relatively bright spot in the report was employment in the construction sector.  Up by 900 jobs for the month, construction activity has added 7,400 jobs over the past year.

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 hereTable-Seasonally Adjusted NFPE.

Print Friendly

Metro Area Employment and Unemployment – August 2015

By , October 1, 2015 4:31 PM

The latest report on metropolitan area unemployment rates came out yesterday, showing unemployment rates down in all of Arkansas’ metro areas.  The not-seasonally adjusted data showed that on a year-over-year basis, unemployment rates were down by amounts ranging from 0.5% in Fort Smith to 1.6% in Memphis.  The report from the Bureau of Labor Statistics cited a figure that 365 of the 387 metropolitan areas across the country experienced unemployment rate declines since August 2014.

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

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

As is typically the case, the change in unemployment rates from July to August is complicated by seasonal factors.  Not seasonally adjusted data indicate sharp declines of more than half a percentage point in all eight metro areas; however, that is typical of July-to-August changes.   Yet even after seasonal adjustment, rates were down around the state.  Three metro areas matched the 0.2% decline previously reported for the statewide unemployment rate (Fayetteville, Jonesboro and Texarkana).  Fort Smith and Pine Bluff saw declines of 0.1%, while Little Rock and Memphis saw even larger drops.

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.   Employment was down by 0.5% in Jonesboro and Memphis, and down by 0.2% in Texarkana*.   Employment in Pine Bluff was unchanged, and was up in the remaining metro areas.  Gains were particularly large in Little Rock (+0.7%) and Hot Springs (+0.8%).  Employment is now higher than pre-recession levels in four of the eight metro areas (Jonesboro, Fayetteville, Little Rock and Hot Springs).

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

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

# # #

*Note:  Payroll data for Texarkana (which now include Little River County) are not presently being published by the BLS on a seasonally adjusted basis.  Payroll employment figures for Texarkana refer to data that have been seasonally adjusted by the Institute for Economic Advancement.

Print Friendly

Arkansas Personal Income – 2015:Q2

By , September 30, 2015 3:36 PM

New data on personal income by state for the second quarter show an increase of 0.8% in Arkansas, compared to 0.9 for the United States.  Over the past four quarters, income has expanded 3.1% in Arkansas and 4.1% nationwide.  Today’s report also included a sharp downward revision to first-quarter income growth for Arkansas:  Originally reported at 1.0%, first quarter growth is now reported to have been only 0.2%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The table below reports growth rates for some of the major components of personal income.  For both Arkansas and the U.S., farm income contributed negatively.  On a year-over-year basis, farm income in Arkansas was down 17.7%, although that is a smaller decline than the 34.7% drop for the U.S.  Arkansas Proprietors’ income was flat in the second quarter and was down 2.1% on a year-over-year basis.  However, that component of income had previously shown much higher growth in Arkansas than for the nation as a whole:  From 2010:Q2 to 2015:Q2, proprietors’ income in Arkansas was up by a total of 56.1% (9.3% annual rate).  For the same five-year period, U.S. proprietors’ income rose 34.1% (6.0% annual rate).

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The breakdown of earnings by industry shows strengths and weaknesses in Arkansas that mirror the national averages.   Earnings growth was negative in Farming, Forestry & Fishing, and particularly in Mining.  Durable goods manufacturing was negative as well.  Most of the earnings growth was attributable to a subset of service-providing sectors.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

 

 

Print Friendly

Metro Area GDP

By , September 24, 2015 4:34 PM

Yesterday, the Bureau of Economic Analysis released new statistics on GDP for the nation’s metropolitan areas.  The BEA reported that the average growth rate for U.S. metro areas in 2014 was 2.3%.  Among metro areas that cover parts of Arkansas, only Fayetteville (at 3.1%) exceeded that average.  In fact, five of the state’s eight metro areas showed negative growth in 2014.  Pine Bluff experienced the largest contraction, -3.0%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Over the five year period since the trough of the 2008-2009 recession, Arkansas’ metro areas have shown a wide range of growth rates.  From 2009-2014, Fayetteville’s GDP expanded by 25.8% and Hot Springs’ by 20.8%.  At the other extreme, GDP in Pine Bluff has declined by 8.5%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The newly-released statistics are preliminary and incomplete, and are therefore subject to future revision.  As shown in the table, as well as in the figure below, revisions to GDP growth rates can be substantial.   For example, 2013 GDP growth for Hot Springs was revised upward from 1.9% to 4.5%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The BEA report also included information on per capita GDP, which might be considered a better indicator of economic performance (because it accounts for differences in population growth).  Statewide, GDP per capita in 2014 was $37,334 (in 2009 inflation-adjusted dollars), amounting to 75.5% of the U.S. figure of $49,469.  Little Rock had the highest per capita GDP, but at $48,773, still fell slightly below the national level.  Pine Bluff had the lowest per capita GDP, $29,238 or 59.1% of the U.S. average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Print Friendly

Arkansas Employment and Unemployment – August 2015

By , September 18, 2015 10:53 AM

The Arkansas unemployment rate decreased two-tenths of a percent in August, mirroring the decline that had previously been reported on the national level.  At 5.4%, the state’s unemployment rate is nearing pre-recession levels.  The August unemployment drop was attributable to both an increase in the number of employed (+3,910) and a decline in the number of unemployed (-2,490).

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
The data on nonfarm payrolls showed a monthly increase of 1,700 jobs (seasonally adjusted).   Compared to the previous month, employment was down in the goods producing sectors and retail trade.   Employment was up in most service-providing sectors, with Education and Health Services, in particular, continuing to  expand.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Compared to a year earlier, payroll employment in Arkansas is up 26,800.  Job gains over the past 12 months have been fairly broad-based, with the notable exception of Manufacturing.  In fact, Manufacturing employment is still 6,000 jobs lower than at the employment trough of February 2010, and down 35,400 since the onset of the 2008-09 recession.  Overall employment is now 7,200  (0.6%) above pre-recession levels.

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.

Print Friendly

Arkansas Taxable Sales – 2015:Q2

By , September 15, 2015 11:30 AM

After crunching the numbers from the Arkansas Department of Finance and Administration, Arkansas Taxable Sales (ATS) in the second quarter of 2015 appears to have declined slightly (-0.8%, seasonally adjusted).  Compared to the same time a year earlier, however, ATS was up 3.2%.  A broader measure of spending — Arkansas Taxable Sales Including Gasoline (ATSIG) — was down just one tenth of a percent from the previous quarter, and up 0.8% from the second quarter of 2014.

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

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

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

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

Swings in retail gasoline prices have been important for recent quarterly growth rates.  Although gasoline prices have been trending downward for over a year, prices in the second quarter of 2015 were up slightly from earlier in the year.  According to data from the Oil Price Information Service, gasoline prices in Arkansas averaged $2.40 in the second quarter, up from $2.10 in the first quarter.  Combined with data from the state’s motor fuel tax, we calculate that total spending on gasoline was up 12.3% for the quarter, accounting for the relative strength of ATSIG as compared to ATS.  The higher gasoline prices are also likely to have contributed to the slowdown in non-gasoline consumer spending.

Since peaking in June at $2.52/gallon, Arkansas gasoline prices have again resumed their downward trend.  The average price in August was $2.31, and recent data from the AAA Fuel Gauge Report showing the statewide average at under $2.10 ($2.066 as of today’s date).  The declining gasoline prices are likely to suppress total ATSIG spending in the current quarter, but the extra purchasing power available to households should help support non-gasoline spending.  In fact, preliminary monthly data indicate that ATS has been increasing through the summer months, and was up 8.7% in July (compared to July of the previous year).

# # #

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 2015:Q2 (Excel file).

 

Print Friendly

Arkansas Home Sales – July 2015

By , September 10, 2015 10:56 AM

The latest monthly report from the Arkansas Realtors® Association shows a continuing uptrend in home sales around the state.   Sales of new and existing homes in July were up 9.9% compared to the previous year.  This followed a year-over-year increase of 15% in June.  Typically, the peak sales month of the year occurs in June, July or August.  Given the strength of the June report, it would not have been surprising to see a slight drop-off in July.  However, sales of 3,161 homes in July managed to exceed the 3,113 figure for June.  Cumulatively, over the first 7 months of the year, home sales are up 10.3% compared to 2014.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Seasonally adjusted data shown in the chart below clearly show the upward trend in home sales over the past 3 years.  The early phase of the recovery may have been driven, in part, by demand overhang from the recession and its aftermath.  Over the past 1-1/2 years, on the other hand, we’ve seen a pick up in job growth that has undoubtedly helped to spur increasing home sales.  Another factor behind this summer’s strength in real estate markets is the outlook for interest rates.  Mortgage rates remain near historic lows, but it is anticipated that the Federal Reserve will begin raising rates soon — perhaps as soon as next week.  Some of this summer’s home sales activity might be related to home buyers seeking to finalize their new home purchases before higher mortgage rates materialize.

Source: Arkansas Realtors® Association; Seasonal adjustment by the Institute for Economic Advancement.

Source: Arkansas Realtors® Association; Seasonal adjustment by the Institute for Economic Advancement.

The strength in home sales has been concentrated in the larger metropolitan-area markets.  Northwest Arkansas sales increases have been particularly robust:  Washington and Benton Counties combined showed a year-over-year increase of 20.6% in July.  Among the ten highest-sales counties in the state (table below), there are a handful in which July sales were below a year ago.  However, all ten show increases in year-to-date sales.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

 

Print Friendly

Arkansas House Prices – 2015:Q2

By , September 4, 2015 11:09 AM

Recently-released data from the Federal Housing Finance Agency (FHFA) show that Arkansas house prices continued an upward trend during the second quarter of 2015.  Statewide, the FHFA “expanded data” index increased by 1.0% from the first quarter, and was up 2.9% from a year earlier (seasonally adjusted).  By comparison, the national index was up 1.5% quarter-to-quarter, and up 6.2% year-over-year.

Source:   Federal Housing Finance Agency

Source: Federal Housing Finance Agency

Around the state, metro-area house prices (as measured by all-transactions indexes) were generally up — with the notable exception of Fort Smith.  Volatility in the Fort Smith index masks a longer-term stability, with prices basically flat compared to five years ago.  Among other metro areas, year-over-year increases ranged from 1.7% in Little Rock to 4.9% in Jonesboro.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

Over the past five years, the metro areas with the most rapid rates of appreciation were Fayetteville and Jonesboro, both up 8.5%.  Since reaching a low point in 2011:Q2, house prices in Fayetteville have increased by 14.3%, recovering over half of the losses experienced from the beginning of 2007 through 2011:Q2.  As shown in the chart below, house price changes have varied considerably around the state since the housing market boom peaked around the beginning of 2007.  Prices remain 5% to 10% lower in Fayetteville and Memphis, but are up 10% to 15% in Jonesboro and Texarkana.  As measured by the all-transactions index, the statewide average of house prices is up slightly from 2007 (+0.5%).

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

 

Print Friendly

Metro Area Employment and Unemployment – July 2015

By , September 1, 2015 12:10 PM

New data on unemployment rates in Arkansas metro areas show continuing downward trends.  From July 2014 through July 2015, the state’s unemployment rate declined by 0.8%, with metro area changes ranging from -0.4% (Fort Smith) to -1.2% (Memphis and Texarkana).

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

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

Seasonally adjusted data indicate month-to-month declines in unemployment in 5 metro areas, with rates unchanged in Hot Springs and Texarkana.  The unemployment rate in Memphis ticked up by one-tenth of a percentage point.

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

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

As shown in the figure below, unemployment rates rose slightly in the early months of the year, peaking in April or May.  With the exception of Memphis, rates have resumed their decline over the past two to three months.  The seasonally-adjusted unemployment rate for Fayetteville fell below 4.0% for the first time since April 2008.  At the other extreme, unemployment in Pine Bluff has yet to fall below 7.5%.

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

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

Payroll Employment
Data on nonfarm payroll employment (seasonally adjusted) show mixed changes on a month-to-month basis.  Metro areas showing employment losses in July included Fayetteville, Fort Smith, Hot Springs, Memphis, and Pine Bluff.  Increases were recorded for Jonesboro, Little Rock, and Texarkana.  Compared to a year ago, employment is up for six of eight metro areas covering parts of Arkansas, with only Fort Smith and Pine Bluff registering year-over-year declines.  The news release from the Bureau of Labor Statistics noted that Pine Bluff had the largest year-over-year percentage decline in the nation.  A rather sharp monthly drop in Hot Springs dropped the employment total for that metro area back below pre-recession levels, after having briefly moved into positive territory in June.

Source:  Bureau of Labor Statistics, Current Employment Statistics

Source: Bureau of Labor Statistics, Current Employment Statistics

Print Friendly

Panorama Theme by Themocracy

AWSOM Powered