Institute for Economic Advancement

Metro Area Unemployment and Employment – February 2016

By , April 7, 2016 4:55 PM

New data on unemployment rates in  metro areas came out yesterday.  However, the full time series for employment, unemployment and labor force participation are still not available following the most recent data revision.  Consequently, the only information to report at this time is the not-seasonally adjusted unemployment rates for February.  As shown in the table, unemployment rates have fallen substantially over the most recent 12 months in all eight of the metro areas covering portions of Arkansas.  Declines range from one full percentage point in Texarkana to 1.7% in Memphis.  The BLS News Release noted that Memphis was tied for the largest unemployment rate decline among the 51 metro areas in the country with a population of 1 million or more.

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

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

Payroll Employment:
As previously reported, statewide nonfarm payroll employment rose sharply in February, increasing by 6,100 jobs (0.5%).  Over half of that net job gain took place in Northwest Arkansas:  Employment in the Fayetteville-Springdale-Rogers metro area rose by 3,100 for the month — 1.3%.  Gains were also reported in Jonesboro, Little Rock, and Pine Bluff.  Employment was down for the month in Fort Smith, Memphis, and Texarkana.*  On a year over year basis, employment is up in all metro areas except Pine Bluff.

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

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

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Note:  Seasonally adjusted payroll employment data for Texarkana remain temporarily unavailable from the BLS.  The data in this report were seasonally adjusted in-house at the Institute for Economic Advancement.

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Arkansas Employment and Unemployment – February 2016

By , March 25, 2016 11:41 AM

The employment and unemployment report for February was unambiguously positive.  For the second month, the unemployment rate declined by more than one-tenth of a percent:  Following a 0.3% decline in January, the rate dropped another 0.2% in February, to 4.2%.  A one-half percent decline in unemployment in Arkansas is literally unprecedented (at least going back as far as 1976).

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The February decline in the unemployment rate was underpinned by a significant increase in the number of employed Arkansans (+10,702) and a decline in the number of unemployed (-2,342).   The first two months of 2016 have seen some remarkable changes in these statistics, but even over a longer period, the trends are clearly positive.  Over the most recent six months, the household survey has shown employment gains averaging over 5,000 per month, and average declines in the number of unemployed by over 1,700 per month.  It is quite likely that some of the recent statistics will ultimately be revised to smooth out some of the unusually large changes, but the data clearly show encouraging trends.

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

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

Payroll Employment
The report on nonfarm payroll employment was similarly upbeat.  Total payroll employment rose by 6,100 in February (seasonally adjusted).  Moreover, the data from January were revised upward by approximately 1,000 jobs.  The recent payroll data have shown more volatility than the household employment statistics, but still indicate positive trends.  Over the past six months, payroll employment gains have averaged approximately 2,700 per month.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The table below shows that February’s employment gains were broad based.  Sizable gains were recorded for Leisure & Hospitality Services, Transportation & Utilities, and Retail Trade.  Construction employment also showed a strong increase.  Combined with a monthly rises in Manufacturing employment, goods-producing sectors contributed positively to the month’s employment increase.

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

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

Compared to February of 2015, payroll employment has increased by 27,900 jobs–a 2.3% rate of expansion.  The only sectors to have lost jobs over that period are Mining & Logging (which has been affected by a slowdown in energy-producing activities) and Manufacturing (which has been subject to a long-term downward trend).  Employment in service sectors and in Retail Trade have accounted for the bulk of employment growth over the past year — and over the course of the entire economic expansion for that matter.  With the recent increases, statewide employment is now 21,400 higher than it was before the recession hit in 2008.

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*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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Personal Income – 2015:Q4

By , March 24, 2016 12:52 PM

New data on state personal income shows that incomes in Arkansas grew by 0.5% in the fourth quarter of 2015, compared to an increase of 0.8% for the U.S.   From the fourth quarter of 2014 through the fourth quarter of 2015, personal incomes rose by 3.4% in Arkansas and by 4.0% nationwide.  Inflation, as measured by the price index for personal consumption expenditures, rose by 0.5% over the year, so real (inflation-adjusted) incomes rose by 2.9% in Arkansas and 3.5% nationwide.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

On an annual average basis, personal income rose by 3.9% in Arkansas, somewhat lower than the nationwide growth rate of 4.4%.  Arkansas’ growth rate ranked number 26 among the 50 states.

Total earnings by place of work, which excludes Dividends, Interest & Rent; and Personal Current Transfer Receipts, expanded by 3.2% in Arkansas and 4.2% for the U.S.  The table below breaks down the growth rates of earnings by industry.  Farm incomes were down in Arkansas, but declined by much less than the national average. Earnings in the mining sector were down all around the nation, reflecting low oil prices.  Earnings in durable goods manufacturing were also down slightly in Arkansas, in contrast to a 2.0% nationwide growth rate.  Areas of strength–particularly in Arkansas–included Forestry, Fishing, and Related Activities; Accommodation and Food Services; and Construction.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas’ per capita income in 2015 was $39,107, representing about 82% of the U.S. average of $47,669.  Arkansas ranked 41st among the 50 states in per capita personal income.  As shown in the figure below, per capita income in Arkansas was less than 80% of the U.S. average during the early stages of the economic recovery, rose to 82% during 2011 and 2012, and has remained at approximately that relative level since then.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

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Arkansas Home Sales – January 2016

By , March 23, 2016 3:52 PM

The Arkansas Realtors® Association this morning announced monthly sales figures for January 2016.  January is typically the lowest sales month of the year, so the monthly total will ultimately account for a relatively small share of total sales for the year.  Nevertheless, as shown in the figure below, January sales are often a harbinger of how the year will turn out.  In 2016, January sales of 1,831 were 9.1% higher than a year earlier. It was the highest January sales total since 2007.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The relatively mild winter we experienced in Arkansas may have contributed to unusually strong January sales.  Seasonal factors aside, however, the January sales figure is consistent with the trend of increasing home sales that has prevailed since at least the beginning of 2013 (see figure below).  Even if seasonally adjusted monthly sales figures leveled-off at the January pace for the remainder of 2016, total sales for the year would exceed 2015 by approximately 4%.

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

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

Among the largest counties in the state, sales were consistently robust.  The only county in the top five to experience a decline in sales from January 2015 to January 2016 was Washington County.  Yet that small decline (-3.8%) was measured from a unusually strong 2015 base.  In 2015, home sales in Washington county were up nearly 30% from the previous year, so the cumulative increase from January 2014 to January 2016 was 24.5%.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

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Metro Area Employment & Unemployment – January 2016

By , March 18, 2016 5:04 PM

New data on employment and unemployment in metropolitan areas were released this morning by the Bureau of Labor Statistics.  The BLS report noted that unemployment rates were “lower in January than a year earlier in 333 of the 387 metropolitan areas.”  All of the metro areas covering parts of Arkansas fell into this category.  As shown in the table below, metro unemployment rates have declined dramatically over the past 12 months, with changes ranging from -1.1 percentage points in Fort Smith to -2.3 percentage points in Pine Bluff.  Significant differences in unemployment rates around the state remain:  The unemployment rate in Northwest Arkansas stood at 3.3% in January (not seasonally adjusted) while the rate for Pine bluff was 6.4%.

Source:  Bureau of Labor Statistics.

Source: Bureau of Labor Statistics.

Data from the household survey–including unemployment rates–were revised since the release of the December data.  However, the revised estimates have not yet been loaded into the BLS time series database, nor have revised seasonally adjusted estimates yet been reported.  Consequently, further detailed examination of the paths of unemployment in Arkansas metro areas will await the availability of the revised data, scheduled to be available on April 15th.

Payroll Employment
Nonfarm payroll employment dropped statewide in January, with the decline reflected in the metropolitan area data for Fayetteville, Hot Springs, Memphis and Pine Bluff.  Jonesboro and Texarkana saw employment gains for the month, while Little Rock and Fort Smith were essentially unchanged.  Compared to a year ago, employment was up in most areas of the state, with the exception of a small decline registered for Pine Bluff (which is also the only metro area in the state with net employment losses since the employment trough of February 2010).  After revisions (see below), only three metro areas presently display higher levels of employment than before the 2008-09 recession.

Source:  Bureau of Labor Statistics.

Source: Bureau of Labor Statistics.

The payroll data have been revised as part of the annual benchmark processing to reflect 2015 employment counts from the Quarterly Census of Employment and Wages.  Not seasonally adjusted figures were revised back to April 2014, and seasonally adjusted numbers were revised back to January 2011.  As summarized in the table below, and illustrated with the subsequent panel of charts, the revisions were in some cases quite substantial.

The revisions were generally positive, with the notable exceptions of Jonesboro and Hot Springs.  Previously reported data had shown Jonesboro to be the fastest-growing metro area in the state, expanding by 7.5% during 2014 and 2015.  That growth rate was marked down by nearly two percentage points.  Meanwhile a sharp upward revision to the data for Northwest Arkansas put the Fayetteville-Springdale-Rogers metro area into the top growth rate position (11.1%).  The other downward revision affected Hot Springs:  A 2.3% downward revision to the estimated level of employment in Hot Springs lowered reported growth from 3.7% to 1.6% for the 2014-15 period.

Source:   Bureau of Labor Statistics

Source: Bureau of Labor Statistics

The largest positive revision was reflected in a 6.3% increase in estimated employment in Pine Bluff.  Previously reported data had indicated a 6.8% contraction in employment — primarily over the first half of 2015.  The revised data suggest that employment in Pine Bluff has stabilized over the past two years.

A similar, albeit smaller, positive revision for Fort Smith changed estimated employment growth from negative to positive.  Previously published data for Texarkana* had indicated sluggish growth but the new data indicate a robust pace of employment expansion.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

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Note:  Seasonally adjusted payroll employment data for Texarkana remain temporarily unavailable from the BLS.  The data in this report were seasonally adjusted in-house at the Institute for Economic Advancement.

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Arkansas Employment and Unemployment – January 2016

By , March 14, 2016 4:08 PM

The Arkansas unemployment rate dropped three-tenths of one percent in January to 4.4%.  The decline reflected an increase in the number of employed Arkansans of more than 10,000 and a decline in the number of unemployed by nearly 4,000.  Both the 0.3% decline in the unemployment rate and the 10,000 increase in household employment are not unprecedented, but are unusually large.  We should bear in mind that there is always a margin of error in reported statistics — particularly the initial releases — and month-to-month changes are not necessarily indicative of significant underlying developments.  Nevertheless, the unemployment rate decline and the changes in household employment and unemployment are positive indicators.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Payroll Employment
In contrast to the large gain in employment from the household survey, nonfarm payroll employment declined by 5,100 in January (seasonally adjusted).  However, the decline followed a December increase of 6,800 (revised), so the net change from November to January was +1,700.  This type of monthly reversal suggests a likelihood that unusual seasonal influences are relevant.  It is normal for employment to rise in December and then drop off sharply in January.  (In fact, the not-seasonally adjusted payroll employment numbers show a decline of 24,500 in January.)  The temporary spike in the seasonally adjusted figures for December-January suggest that seasonal employment increased more than usual in 2015, with the drop-off in January reflecting a return to more normal conditions.

As shown in the table below, the January drop in employment was attributable to declines in several sectors, including Construction, Transportation & Utilities,  Professional & Business Services, and Other Services.  Compared to January of 2015, only two sectors have shown net declines:  Mining and Logging (which has been adversely affected by low energy prices) and Manufacturing.

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

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

Annual Revisions
With this data release, the BLS released the results of the annual benchmark revisions to the payroll data.  As expected, the revised data show downward revisions to the data for late 2014 and the first part of 2015, with a cumulative adjustment of -8,700 jobs through April 2015.  However, revisions to data from the later part of 2015 reversed those downward adjustments.  By December, the revised data show a net upward revision of +3,100 jobs.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

We will report details of the payroll employment revisions by sector and for metropolitan areas in subsequent posts on the Arkansas Economist.

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*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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Arkansas Home Sales – December 2015

By , March 10, 2016 3:34 PM

The latest data from the Arkansas Realtors® Association shows a year-end surge in home sales.  Compared to the previous year, home sales were up 19.6% in December.  There is often a year-end uptick in home sales, but the most recent increase was far larger than usual.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

For two reasons, however, this measured increase is probably overstating the trend rate of growth.  First, the previous December was relatively weak, so this December’s growth rate is calculated from a low base.  Second, the timing vagaries of closing dates on real-estate transactions can sometimes result situations where transactions that might have concluded in November were carried over into December — that is, there is often some month-to-month randomness.  The seasonally adjusted data shown below–which strips away some of the predictable seasonal variation — suggest this might have been the case at the end of 2015.   It is November’s relative weakness that stands out as the deviation from the prevailing trend.

ARA_1215_SA

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

Another way to look past the monthly variability is to consider quarterly-averages.  Year-over-year growth for the entire fourth quarter of 2015 was up 11.6% from the previous year, up slightly from the 10.2% growth rate of the first three quarters of the year.

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

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

Total sales for the year topped 30,000 for the first time since 2007, and were 10.6% higher than the total for 2014.  The outlook for 2016 is for continued sales growth, as improving economic conditions and an ongoing environment of relatively low mortgage rates continues (for now).

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Revised Unemployment Statistics for 2015

By , February 29, 2016 12:16 PM

Annual revisions to the Local Area Unemployment Statistics (LAUS) have been completed by the Bureau of Labor Statistics.  For Arkansas, the revised data show a lower unemployment rate throughout 2015 than was previously reported.  In particular, the newly revised data eliminate a mysterious surge in the unemployment rate that was originally reported during the late spring months of 2015.  The new numbers show that the Arkansas Unemployment rate stood at 4.7% in December, revised down from 4.8%.

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

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

As shown in the panels below, the revision to the Arkansas unemployment rate is largely attributable to a revised path for the number of unemployed.  The figures also show that the number of employed Arkansans at the beginning of 2015 was revised downward, so that the growth rate of household employment was actually higher than originally reported.

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

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

The newly revised statistics are from the program sometimes referred to as the “household survey.”  Data on nonfarm payroll employment come from an independent survey of employers.  Revisions to the payroll data will be announced on March 14th.   Estimates constructed by the Institute for Economic Advancement suggest that the current level of nonfarm payroll employment for Arkansas will be revised downward by approximately 8 thousand jobs.

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FHFA House Prices – 2015:Q4

By , February 25, 2016 4:08 PM

New data from the Federal Housing Finance Agency (FHFA) show continuing appreciation of Arkansas house prices.  As illustrated in the figure below, the FHFA Expanded-Data Index for Arkansas increased in each quarter of 2015.  In the fourth quarter, the index was up 1.1% from the previous quarter, and 3.2% higher than the previous year.  The index for the U.S. — recovering from a significantly sharper decline of 2007-2011 — was up 1.3% for the quarter and 5.6% for the year.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

The expanded data indexes are only available at the state level, but the FHFA publishes All-Transactions indexes that cover metropolitan areas as well.  The table below summarizes recent house-price changes in Arkansas’ eight metro areas.  In the fourth quarter, prices were down in Little Rock, Pine Bluff and Texarkana.  For the year, prices were down only slightly in Texarkana, but were higher in all other metro areas (as well as the non-metropolitan portions of the state).

Source:  Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

House prices in Northwest Arkansas have shown the most rapid appreciation over the past five years, but are recovering from the largest house-price declines in state during the 2007-2011 period.  In fact, the figure below illustrates that most of the state’s metro and non-metro areas suffered only modest declines during the nationwide housing price collapse, and all have shown at least modest appreciation over the most recent two- to five-year period.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

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Arkansas Home Sales – November 2015

By , February 4, 2016 4:45 PM

The Arkansas Realtors® Association released their penultimate monthly report for 2015 this morning, showing a total of 2104 homes sold in Arkansas during November.  Home sales typically drop off sharply toward the end of the calendar year, and this year is no exception.  Nevertheless, November’s total was up 4.3% from the previous year.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

December is always a relatively slow month as well, so the cumulative year-to-date totals reported today provide a good indication of how the year will turn out.  For the first 11 months of the year, home sales were up 9.2% compared to the same period in 2014.

As shown in the chart below, seasonally adjusted data reveal that November’s home sales were somewhat below the recent growth trend.  However, a single month slowdown provides little reason to expect that the steady growth we’ve seen over the past 3 years will abate.  In a forecast presented in early November, we anticipated that 2015 sales growth would end up at close to 9%, and projected a year of double-digit growth for 2016.

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

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

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