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Arkansas Personal Income – 2016:Q3

By , December 20, 2016 3:43 PM

Personal income increased by 0.9% in Arkansas in the third quarter, a slightly smaller increase than the nationwide gain of 1.1%.  Percentage changes among the 50 states fell within a relatively narrow range, from +0.4% in Oklahoma to +1.4% in South Dakota.  Arkansas’ growth rate ranked #41.  Over the most recent four quarters, Arkansas personal income increased by 3.3%, compared to a 3.5% increase for the U.S.  Over the course of the current economic expansion (from 2010:Q1), Arkansas income growth has averaged 4.2% while the U.S. average has been 4.3%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Net earnings rose 1.1% in Arkansas and 1.3% for the U.S.  This morning’s report from the Bureau of Economic Analysis noted that earnings “was the leading contributor to growth in personal income in most states.”  Income from dividends, interest, and rent was also an important contributor for Arkansas, as has been the case throughout the current expansion.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Earnings by sector:  Earnings growth in the third quarter was strongest in service-providing sectors, although growth was spread fairly evenly across sectors.  The categories of Farm income, Mining, and Forestry were the only sectors with negative income growth.  Income in the construction sector showed an encouraging 1.1% rate of increase in Arkansas.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

On a per capita basis, Arkansas personal income increased 0.8% in the third quarter, a slightly smaller increase than the U.S. average of 0.9%.  At $39,602, per capita personal income was 79.7% of the U.S. average ($49,681), down one-tenth of a percentage point from the 79.8% reading in the second quarter.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas Personal Income – 2016:Q2

By , September 28, 2016 4:28 PM

New data from the Bureau of Economic Analysis shows total personal income in Arkansas increasing by 1.1% in the second quarter, up from a growth rate of 0.6% in the first quarter (revised).  The second quarter growth rate slightly exceeded the national average of 1.0%, and represented the 16th highest growth rate among the 50 states.  Compared to a year earlier, Arkansas personal income was up 3.1%, compared to 3.2% nationally.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The second quarter increase represented gains in all major income categories:  Wages and Salaries increased by 1.3%; Proprietors’ income was up 0.8%, Dividends, interest and rent rose 1.1%; and Personal current transfer receipts increased 1.7%.

A breakdown of earnings by industry shows gains in most of Arkansas’ sectors.  One clear exception was mining, which has been impacted by low oil prices.  The BEA report noted that lower earnings in mining was the leading contributor to below-average earnings growth in several of the slowest growing states (which are also significant oil-producing states).  Earnings growth was also negative in Construction, Educational services, as well as in the leisure and hospitality services sectors.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Today’s report incorporated annual revisions to the personal income data.  For Arkansas, the revisions represented fairly substantial downward adjustments to income.  As illustrated in the figure below, Arkansas personal income was revised down by 1.5% in 2013, by 0.5% in 2014, and by 2.2% in 2015.  The revisions were primarily attributable to new figures for Proprietors’ income, as well as Dividends, interest and rent.  The BEA reported that nonfarm proprietors’ income, in particular, was subject to substantial revision due to methodological improvements that were implemented with this revision.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The data revisions had a particularly noticeable impact on measured income growth in 2015.  As previously reported, the data showed a growth rate of 3.6% from 2014:Q4 to 2015:Q4.  The revised data now show that increase to be only 1.5%.

Arkansas Personal Income – 2016:Q1

By , June 22, 2016 4:10 PM

Arkansas personal income expanded 1.2% in the first quarter of 2016, outpacing the national average of 1.0%.  The highest growth rate in the nation was Washington state (1.5%), with Arkansas’ growth ranking the sixth-highest among the 50 states.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

All major components of Personal Income showed positive growth in the first quarter, led by a 17.1% increase in Farm proprietors’ income.  Wages and salaries grew at a 1.4% pace, while Dividends, interest and rent expanded by only 0.3%.

Total earnings expanded 1.7% — a higher growth rate than any other state except Washington.  The table below shows the growth rates of total earnings by industry, showing that  Arkansas’ strong performance was largely attributable to the gain in Farm income.   Mining (including oil and natural gas extraction) was the weakest sector for both Arkansas and the total U.S.  The news release from the Bureau of Economic Analysis noted that mining income had experienced its 5th consecutive quarterly decline, falling 15.8% nationally since the fourth quarter of 2014.  Over the same period, mining income in Arkansas contracted by 17.4%.  Arkansas’ growth outpaced the nations in most sectors, particularly in service-providing sectors.  However, earnings in durable goods manufacturing declined slightly in Arkansas, in contrast to a small gain nationwide.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

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

 

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

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

 

 

 

Arkansas Personal Income – 2015:Q1

By , June 22, 2015 3:26 PM

Personal income in Arkansas increased by 1.0% in the first quarter of 2015, outpacing the national average 0.9%.  Arkansas’ growth rate ranked 25th among the 50 states.  The 1st quarter increase in income comes on top of an upwardly revised figure of 1.9% growth in the 4th quarter (previously reported at 1.2%).  Over the past four quarters, incomes have increased by 4.9% in Arkansas, compared to 4.4% for the entire U.S.  Relative to the previous cyclical peak (2008:Q2), incomes have risen 22.6% in Arkansas.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Farm income and proprietors’ income more generally were down, both in Arkansas and nationally.   On the other hand, personal current transfer receipts were up sharply, reflecting several special factors including a 1.7% cost-of-living adjustment to social security benefits.

Earnings was up 0.7% and accounted for 44% of total personal income growth.  As shown in the following table, earnings growth was relatively strong in Utilities, Construction, Management of companies and enterprises, and Accommodation and food services.  In addition to the decline in farm income, earnings from Manufacturing and Mining were also negative.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

Local Area Personal Income – 2013

By , November 20, 2014 4:47 PM

The Bureau of Economic Analysis released new statistics on local area personal income this morning.  The new data for metro areas and counties show a pronounced slowdown in economic growth in 2013 compared to 2012, but the slowdown was not unique to Arkansas.  Nationwide, per capita personal income growth slowed from 4.4% in 2012 to 1.3% in 2013.   As shown in the table below, Fayetteville was the only metro area in Arkansas that grew faster than the national average in 2013.   Growth in three of Arkansas metro areas was negative in 2013, and with the exception of Northwest Arkansas none of the state’s metro areas experienced growth above 1%.  Revised figures for 2012 show that the slowdown in 2013 was particularly sharp in Arkansas, with all metro areas falling from above average growth in 2012.  Taking a somewhat longer view, two-year average growth rates for all of Arkansas’ metro areas except Texarkana exceeded the nationwide average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The same pattern of sharp deceleration was evident in the county-level data as well.  Each of Arkansas’ 75 counties experienced a slowdown in growth between 2012 and 2013.  Individual county growth rates ranged from a high of 6.9% in Scott County to a low of -4.6% in Hempstead County.  Above-average growth was more common among individual counties than among metro areas:  34 of the state’s counties had growth rates that exceeded the national average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Levels of per capita income continue to vary widely across the state.   In 2013, three of Arkansas’ counties had per capita personal income above the national average:  Pulaski, Union, and Arkansas counties.  At the other extreme, Sevier county had per capita income that was only 55.7% of the U.S. average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas Personal Income – 2014:Q2 and Revisions

By , October 6, 2014 8:47 AM

New data on personal income that came out last week included first-published data for the second quarter of 2014, along with revisions going back as far as 2001.  The news on personal income for Arkansans was generally quite positive, but also highlighted some areas of weakness in the state’s economic expansion since the 2008-09 recession.

The news for the most recent quarter was certainly upbeat:  Personal income in Arkansas rose 1.9%–above the national average of 1.5% and ranking Arkansas as the 7th fastest growing state for the quarter.  A revision to the data for the first quarter of the year was also good news:  Previously reported as a decline of 0.2%, the revised data for 2014:Q1 showed an increase of 0.8%.  The update to the first quarter data was largely due to a substantial upward revision to estimates of farm income (which accounted for much of the weakness in the first-published report).  As shown in the chart below, Arkansas personal income is 18.5% higher than at the previous cyclical peak of 2008:Q2.  Over the same period, U.S. personal income is up 17.4%.  On the basis of overall personal income, Arkansas’ cumulative recovery is faring slightly better than the nation’s.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The past revisions to the data for Arkansas were also positive.  As shown in the chart below, the data for 2012 and 2013 were revised upward substantially — averaging 2.3% over that two year period.  The spike in income during the fourth quarter of 2012 was subject to a particularly large revision.  Recall that this spike was attributable to income-shifting associated with changes in income tax laws that went into effect at the beginning of 2013 (see, Arkansas Personal Income – How Policy Has Affected Growth).  It is therefore not surprising that the revision for 2012:Q4, in particular, was primarily attributable to an upward revision of the Dividends, Interest, and Rent component of overall personal income.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

In fact, the entire revision was attributable almost exclusively to the Dividends, Interest, and Rent component.  Of the total average upward revision for 2012 and 2013, Wages and Salaries accounted for approximately 1% and Proprietors’ Income accounted for about 19%.  Transfer Receipts and Employer Contributions for Pensions and Insurance were revised downward.  After those downward revisions in other components, the Dividends, Interest, and Rent component was left to account for 114% of the total revision.

The revision to Dividends, Interest, and Rent reflects a realization that recent earnings on returns to wealth were larger than previously recognized.  But the small revision to Wages and Salaries suggests no improvement in the record on labor compensation during the business cycle expansion in Arkansas.  And even before the data revisions, the pattern was skewed — the new data highlight the imbalance.

The two charts below (using the newly revised data), show how the two components have fared in Arkansas relative to the national average.  The first shows Wages & Salaries, which comprise about 55% of total income in Arkansas.  While the data show that the recession did not impact Wages and Salaries in Arkansas as much as the rest of the nation, the pace of recovery has been slower.  Compared to the peak quarter of total personal income, Arkansas has seen a cumulative increase of 13.0%, while the U.S. increase has been 13.8%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The second chart shows Dividends, Interest, and Rent, which accounts for about 21% of total personal income in Arkansas.  After a downturn of the same magnitude as the U.S. average, this component has shown remarkable growth in Arkansas.  Relative to 2008:Q2, this component has shown a cumulative increase of  27.5% in Arkansas, while increasing a total of 13.3% nationwide.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The relative strength of growth in Dividends, Interest, and Rent — in spite of its relatively small share in total income — fully accounts for the fact that Arkansas personal income growth has exceeded the national average during the economic expansion.  The relatively sluggish performance of the Wages and Salaries component highlights the weakness that appears to be holding back the recovery of the state’s labor markets.

Arkansas Personal Income – 2014:Q1

By , June 24, 2014 3:43 PM

New figures came out this morning showing that Arkansas personal income declined by 0.2% in the first quarter.  Data for the fourth quarter of 2013 were also revised downward to show a 0.2% decline in that quarter as well.  Compared to the first quarter of 2013, the new data indicate year-over-year growth of 1.0%.  The weakness in Arkansas income was concentrated in farm income.  The report from the Bureau of Economic Analysis noted that first-quarter farm earnings declined by more than $1 billion in each of several agricultural states, including North Dakota, Minnesota, Iowa, Arkansas and Nebraska.  The report noted that the declines reflected falling crop prices.  Nonfarm income in Arkansas increased 0.9% in the first quarter, and was up 2.8% from the first quarter of 2013.

PI-2014Q1-map

The declining income in Arkansas over the most recent two quarters contrasts with modest but positive growth in personal income nationwide.  For the U.S. as a whole, personal income was up 0.8% in the first quarter following a (revised) 0.5% increase in the fourth quarter of last year.  The most recent data puts U.S. personal income 14.8% higher than its pre-recession peak.  For Arkansas, first quarter income was 13.6% higher than the previous cyclical peak.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Over the past four quarters, the price index for personal consumption expenditures increased by 1.1%.  Hence, on an inflation-adjusted basis, real incomes in Arkansas have fallen 0.1% over the past year.  For the U.S., real income increased by 2.5% over the same period.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The table below shows the critical role that declining farm income played in the first quarter report.  Total earnings (which includes wages and salaries, supplements to wages and salaries, and proprietors income) contributed -.42% to the quarterly decline in Arkansas personal income. The contribution of farm income to that total was more than a full percentage point.  All other sectors combined contributed +0.65% to personal income growth.  Some sectors showed notable growth, including Construction and Nondurable goods manufacturing.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

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