New forecasts from the USDA’s National Agricultural Statistics Service (NASS) project sizable increases in Arkansas agricultural output in 2012.   Output figures from 2011 and projections for 2012 are summarized in the table below.

Source: USDA National Agricultural Statistics Service.

• Corn production, in particular, is expected to be up sharply from last year.  The increase is attributable to increases in both the number of acres harvested (+23%) and the yield per acre (+23%).
• Cotton production is expected to fall slightly, in spite of a 7% increase in yield.  The number of acres expected to be harvested is down 12%.
• Rice production is expected to be up 18%, with gains coming from increases in both acreage (+11%), and yield (+6%).
• Sorghum output is also expected to benefit from higher acreage (+22%) and yield (+11%).
• Soybean production is expected to be essentially unchanged from last year, with acreage down 2% and yield up 3%.

These statistics suggest that damage from this summer’s drought and from Hurrican Isaac are not as severe as many had feared — at least in Arkansas.  Nationwide, the drought has had a larger impact.  For example, U.S. corn production is forecast to be down 13% and soybean production down 14%.  (Crop Production, September 2012).

Arkansas total personal income increased at an annual rate of 5.0% in the second quarter, slightly slower than the nationwide average of 5.4%. The increase was an improvement over the first quarter growth rate (revised) of 1.9%. Over the most recent four quarters, personal income has increased by 4.0%, compared with the U.S. growth rate of 4.9%.

Source: Bureau of Economic Analysis

The second quarter numbers featured sharp declines in farm income, which also had the effect of depressing total proprietors’ income. The news release from the Bureau of Economic Analysis noted that declining farm income was a leading contributor to earnings declines and slow growth across the agricultural heartland. The unusually sharp declines were in turn attributed to “smaller Market Facilitation Payments in the second quarter of 2019 than in the first quarter.” (The Market Facilitation Program is the major government support program that “provides assistance to farmers and ranchers with commodities directly impacted by unjustified foreign retaliatory tariffs, resulting in the loss of traditional export markets.”)  Wages and Salaries increased at a 4.7% rate — approximately the same pace as the nation. Dividends, Interest and Rent increased at a rate of 8.2% and Personal Current Transfer Receipts were up at a 7.4% pace.

Source: Bureau of Economic Analysis

Data Revisions
Today’s personal income release included annual revisions to the historical data. Data were revised as far back as 1998:Q1; however, substantive revisions were limited to the period from 2012 forward. For Arkansas, the revisions showed a consistently higher adjustment of the total income data, with generally positive effects on growth rates.  In particular, the revised figures show higher growth in 2016 and 2018 than previously reported.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The cumulative effect of the revision was to increase the level of 2019:Q1 personal income in Arkansas by $2.2 billion. The upward revision was more than accounted for by higher estimates for Dividends, Interest and Rent, for which cumulative upward revisions totaled nearly $2.5 billion. Wage and Salary disbursements were marked up by $827 million and Personal Current Transfer Receipts were revised upward by $107 million. Farm income and proprietors’ income showed sharp downward revisions for 2018 and 2019:Q1. The cumulative impact of farm income revisions for the first quarter of 2019 totaled $1.47 billion.

Source: Bureau of Economic Analysis

New data from the Bureau of Economic Analysis shows Arkansas GDP growth of 2.5% for the first quarter (seasonally adjusted annual rate).  This was the highest quarterly growth rate for Arkansas since 2016:Q4.  While this represents solid growth, it fell short of the national growth rate of 3.1% in the first quarter.  Today’s report on GDP by state showed growth rates ranging from a low of 1.2% in Hawaii to a high of 5.2% in West Virginia.  Arkansas’ growth rate ranked it number 38 among the 50 states.

Source: Bureau of Economic Analysis

Over the most recent four quarters, Arkansas GDP growth has grown 1.6%, compared to 3.2% nationwide.

Source: Bureau of Economic Analysis

As detailed in the table below, Arkansas’ growth rate was adversely affected by a sharp decline in Agriculture, which subtracted 0.65% from the state’s overall economic growth.  Positive contributors to the Arkansas growth rate included Manufacturing (of both durable goods and nondurable goods), Retail Trade and Health Care.

Source: Bureau of Economic Analysis

Today’s data release contained no revisions of past data.  The next GDP update is scheduled for November 7, 2019, at which time revised data for 2014:Q1 through 2019:Q1 will be released.

The latest report on state GDP from the Bureau of Economic Analysis shows Arkansas growth rate in the fourth quarter was 1.5% (seasonally adjusted annual rate), well below the U.S. growth rate of 2.2%.  Benefiting from strong growth in oil and gas production, the fastest growing state was Texas at 6.6%.  Arkansas ranked as the 34th highest growth rate among the 50 states.

Source: Bureau of Economic Analysis

The fourth-quarter total for Arkansas was up 1.2% from a year earlier, compared to a year-over-year growth rate of 3.0% for the U.S.  Over the most recent five years, Arkansas GDP growth has averaged 0.9% while the U.S. growth rate has averaged 2.4%.

Source: Bureau of Economic Analysis

As is often the case, data revisions that came out with today’s report (for 2015 through 2018:Q3) are important for putting the most recent data into context.  For Arkansas, these revisions raised estimates of GDP growth in late 2016 and early 2017, but lowered growth estimates for more recent quarters.

Source: Bureau of Economic Analysis

Specifically, the revisions increased growth in the fourth quarter of 2016 from 3.3% to 4.3%, changed the first quarter of 2017 from negative to essentially zero, and raised the second quarter estimate as well (from 1.5% to 2.1%).  From 2017:Q4 forward, however, estimates of Arkansas GDP growth were all lowered.  A notable revision for 2018:Q2 reduced the state’s growth rate from 4.4% down to 1.7%.

Source: Bureau of Economic Analysis

The table below shows a breakdown of contributions to growth by sector.  The largest single contributor to Arkansas’ growth rate in the fourth quarter was wholesale trade, but durable goods manufacturing had a strong showing as well.  Both are relatively large, important sectors in the Arkansas economy.  Other growing sectors included Real Estate; Management of companies and enterprises; and Health care and social assistance.  Oil and gas production also gave the Arkansas economy a boost, but that sector is not as large a contributor to our state’s economy as it is to other states in the region.

Source: Bureau of Economic Analysis

One notable declining sector was Agriculture, which was down 8.7% from the previous quarter.  The contrast between this downturn in production and the surge in farm income that we saw in the fourth-quarter personal income report would seem to indicate that the income surge in agriculture was largely attributable to payments made to farmers as part of the USDA’s Market Facilitation Program, which is intended to assist farmers affected by tariffs and reduced exports.  Payments under this program began in the fourth quarter.  The USDA has recently noted that the program has paid out more than $8.3 billion to nearly 600,000 applicants.  Payments to soybean farmers have comprised a large share of the payouts, and should continue to boost farm incomes in the income data for the first quarter of 2019.

Arkansas total personal income surged at an annual rate of 7.5% in the fourth quarter of 2018, outpacing the U.S. growth rate of 5.2% and ranking as the 5th fastest-growing state in the nation.  The sharp increase was largely attributable to spike in farm income, which increased at an annual rate of 385%.  The increase in farm income was not unique to Arkansas:  The only states to outpace Arkansas’ growth rate in the fourth quarter were the agricultural states of  South Dakota, Iowa, Nebraska and North Dakota.  Even without the volatile farm income component, however, Arkansas personal income increased at a rate of 4.7% — essentially the same rate as the U.S. total.

Today’s report from the Bureau of Economic Analysis also included revised quarterly estimates for 2018:Q1-2018:Q3.  As shown in the figure below, Arkansas growth was revised higher in each of the first three quarters of the year.  The cumulative impact was to increase year-over-year growth by about one-quarter of a percentage point.

Source: Bureau of Economic Analysis

Total earnings contributed 5.27 percentage points to the Arkansas personal income growth rate in the fourth quarter.  As shown in the table below, about half of that growth contribution was attributable to the farming sector.  Other notable contributors included Health care and social assistance, Management of companies and enterprises, and Durable goods manufacturing.

Source: Bureau of Economic Analysis

The fourth-quarter surge in personal income translated to an uptick in per capita income, which reached $43,312.   This figure represents 79.5% of average per capita personal income for the U.S.

Source: Bureau of Economic Analysis

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

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

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

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

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

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

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 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

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.

State-level GDP data for the first quarter of 2018 showed zero growth in Arkansas, placing the state 49th among the 50 states (North Dakota experienced a decline of 0.6%).  The comparable value for U.S. GDP growth in Q1 was 1.8%.

Source: Bureau of Economic Analysis

Over the past four quarters Arkansas GDP expanded by 0.7%, well-below the U.S. average of 2.6%.  As shown in the figure below, Arkansas growth rate has lagged the nation since at least 2014.  From the beginning of 2014 through 2018:Q1, the growth rates of Arkansas and the U.S. have averaged 1.0% and 2.4%, respectively.

Source: Bureau of Economic Analysis

The breakdown of GDP growth by sectors shows that Arkansas’ weakness was largely attributable to the Agriculture, forestry, fishing, and hunting component, which subtracted nearly 0.7 percentage points from overall growth.  Other sectors dragging down Arkansas growth included Wholesale trade and Government.   Several sectors contributed positively to growth, including Manufacturing, Retail trade, Finance and Real estate, and Health Care.

Source: Bureau of Economic Analysis

The slow growth of Arkansas GDP in recent quarters is cause for some concern, but the initial quarterly estimates are subject to considerable revision.  Just six months ago the data were showing Arkansas outpacing the nation with a four-quarter growth rate of 3.6% (2016:Q3-2017:Q3).  The latest information show Arkansas growth rate to have been only 1.4% over that same period.

Later this week (July 27) the BEA will release statistics from the latest comprehensive update for national GDP, but the state-level revisions will not be available until the next quarterly release date on November 14.   Until then, this latest release represents the best information available, and it suggests that the Arkansas economy got off to a relatively slow start in 2018.

In the latest report on state-level GDP, Arkansas registered an increase of 2.5% (seasonally adjusted annual rate).  The fourth quarter increase was slightly lower than the comparable national-average figure of 2.7%, and ranked #26 among the 50 states.  The Bureau of Economic Analysis reported that some of the key contributors to GDP growth in the fourth quarter were mining and construction (particularly in the Texas, the fastest-growing state); as well as durable goods manufacturing and professional, scientific and technical services.  On the other hand, agriculture, forestry, fishing, and hunting decreased for the fifth consecutive quarter, dampening growth in the Plains states in particular.

As shown in the table below, many of the sectors that showed notable growth nationwide also contributed to Arkansas’ overall growth rate.  In addition, nondurable goods manufacturing played a role in boosting Arkansas’ relative growth and agriculture, etc., made a positive contribution.

Source: Bureau of Economic Analysis

Data Revisions
Today’s release also included revisions to previously published data for 2014:Q1 to 2017:Q3.  The newly updates, which incorporate new and revised source data, resulted in a considerable reduction in Arkansas’ reported growth over the past year.

Estimates of state-level GDP growth for the third quarter of 2017 showed Arkansas expanding at an annual rate of 2.0%.  In its news release, the Bureau of Economic Analysis noted that GDP “increased in every state and the District of Columbia in the third quarter.”  Although a 2% growth rates is in line with recent trend growth for both Arkansas and the nation, Arkansas’ growth rate lagged the 3.4% national average for the third quarter, and ranked #43 among the 50 states.

Arkansas’ third quarter growth rate represented a deceleration from the rapid expansion reported for the previous three quarters.  Recent revisions had shown that Arkansas GDP growth had averaged 4.1% from 2016:Q4 through 2017:Q2.  On a year-over-year basis, the third quarter figure — combined with the previous three quarters —  was up 3.6% compared to the nation’s 2.2% rate.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The breakdown by sector suggests why Arkansas GDP growth slowed relative to previous quarters and relative to the national average.  The BEA reported that Finance and Insurance sector was a major contributor to growth nationwide; and at the other end of the spectrum, Agriculture, forestry, fishing and hunting showed its fourth consecutive quarter of decline.  Finance and insurance contributed positively to Arkansas’ growth rate, but represents a relatively small share of the state’s economy.  Meanwhile, agriculture represents a relatively large share, and the Arkansas economy has not escaped the brunt of that sector’s downturn.

Source: Bureau of Economic Analysis

The state-level GDP estimates are subject to considerable revision as additional information becomes available.  The next report, scheduled for May 4, 2018 will release revised statistics for the first quarter of 2014 through the third quarter of 2017.