Institute for Economic Advancement

Local Area Personal Income – 2014

By , December 1, 2015 3:24 PM

The Bureau of Economic Analysis released new data on local area personal income for 2014 last week.  As shown in the figure and table below, per capita personal income increased in all 8 of the metro areas that include parts of Arkansas, with increases ranging from 1.6% in Pine Bluff to 4.1% in Fort Smith.  As measured by the price index for personal consumption expenditures, the general level of prices rose by 1.4% in 2014, so all 8 metro areas saw positive growth even after adjusting for inflation.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The data release also included revisions of estimates from previous years, reflecting information from “source data that are more complete and more detailed than previously available.”  For the most part, the revisions to metro area per capita income were negative.  For 2013, the revised data lowered measured income just slightly in the Memphis metro area, but by larger amounts in the state’s other metros. Other than Memphis, the smallest downward revision was for Texarkana (-5.7%) while the largest was for Hot Springs (-9.6%).  In contrast, the 2013 level of per capita income for the Fayetteville-Springdale-Rogers Metro Area was revised upward by 30%.  A closer look at revisions to data from individual counties shows that the change was primarily attributable to increased estimates of income in Benton County, with the 2013 revision amounting to 63.7%. (Madison county was also revised upward by 13.2%).

A full list of per capita income by county in 2014 — both in terms of dollars and as a percent of the U.S. average — as well as the 2013-14 growth rate is presented below:

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

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Arkansas Employment and Unemployment – October 2015

By , November 20, 2015 1:59 PM

The Arkansas unemployment rate dropped one-tenth of a percent in October, to 5.1%.  The number of unemployed declined by nearly 1,300, while the number of employed increased by 1,200.  After a brief rise in unemployment in the Spring, we’ve seen employment increase by 9,000 from May to October, while unemployment has fallen by 8,400 over the same period.

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

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

Nonfarm Payrolls
Payroll employment declined slightly (-200) from September to October (seasonally adjusted).  Sectors gaining jobs for the month included Manufacturing, Retail Trade, Professional & Business Services, and Other Services.  Leisure & Hospitality Services  and Government declined.

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

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

Compared to one year ago, Arkansas payroll employment is up 19,400.   A surge in Construction employment (+8,200)  accounts for much of that total increase, but other contributors include the rapidly growing service-providing sectors of Professional & Business Services, Education & Health Services, and Leisure & Hospitality Services.  Compared to it’s pre-recession level (December 2007), total payroll employment in Arkansas is up by 7,200 jobs (+0.6%).

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

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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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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.

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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

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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)

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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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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)

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*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.

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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

 

 

 

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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

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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

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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 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).

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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).

 

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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

 

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