A forum for information and analysis on the Arkansas economy

Personal Consumption Expenditures – 2020

The annual data on state-level Personal Consumption Expenditures (PCE) were published last week by the Bureau of Economic Analysis.  The data for Arkansas reaffirm our observation that Arkansas consumers maintained relatively high levels of spending during the depths of the pandemic.  Nationwide, PCE declined 2.6% from 2019 to 2020.  In Arkansas total spending increased–albeit at a rate of less than 0.1%. Arkansas was one of only four states to show an increase for the year. (The other states were Idaho, Utah and Montana.)

Source: Bureau of Economic Analysis

The brunt of the slowdown was borne by services consumption. With opportunities for spending on services severely limited by pandemic-related closures and lockdowns, consumer spending was diverted toward consumption of goods.  In both the national and Arkansas data, goods consumption increased in 2020.  However, the percent increases were larger for Arkansas in each category of spending.  Two categories of goods—Other durable goods and Gasoline—were lower for the year, but the declines were smaller in the Arkansas data.  Similarly, the declines in services consumption were generally much larger for the U.S. than recorded in the Arkansas data.  The only exception was Health care, which increased slightly more in the national data than in Arkansas.

Source: Bureau of Economic Analysis

One reason for the overall relative strength in the Arkansas statistics is the fact that goods consumption has historically  comprised a larger share of total spending in Arkansas.  This larger share of goods-consumption had the effect of boosting the impact of increased spending on goods and de-emphasizing the declining service-sector spending.  However, this effect was small:  If the sector-by-sector growth rates for Arkansas were re-weighted to reflect the higher service-content of the U.S. consumption basket, Arkansas growth rate for the year would be around -0.1%, instead of +0.1%.

Source: Bureau of Economic Analysis

 

 

 

 

 

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Metro Area Employment and Unemployment – August 2021

The latest report on metropolitan area employment shows ongoing improvement in Arkansas’ metro areas, with some recovering from the COVID-19 recession more rapidly than others. Five of the eight metro areas covering parts of Arkansas saw the unemployment rate decline by 0.1 percentage point in August, matching the statewide change.  In Pine Bluff, the unemployment rate declined by 0.3 percentage points, while in Hot Springs the rate dropped by 0.8 percentage points.  In Northwest Arkansas the unemployment rate was unchanged at 2.7%—the lowest reading in the state.

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

Over the past 12 months, changes in unemployment rates largely reflect reversal of the sharp increases that occurred in March and April of 2020.  Hot Springs and Memphis, the two metro areas where unemployment rates have fallen by over 4 percentage points over the past year, experienced particularly high unemployment rates in April 2020, peaking at 15.6% and 13.4%, respectively. Texarkana spiked at 13.8% unemployment last April, but recovered fairly quickly between April and August 2020, experiencing a relatively smaller net change over the past 12 months.

Relative the pre-pandemic conditions, the recovery in Fort Smith has been significant:  The August unemployment rate of 3.6% was the second-lowest in the state, and is 0.1 percentage point lower than it was in February 2020.  Unemployment in Memphis and Texarkana remains elevated, but the unemployment rates in Fayetteville, Hot Springs, Jonesboro, Little Rock and Pine Bluff are all less than one percentage point higher than at the last business cycle peak.

Payroll Employment
Nonfarm payroll employment increased in five of Arkansas’ metro areas in August, with the largest increase in Northwest Arkansas (+0.6%).  Employment in Hot Springs and Texarkana was down for the month, with Little Rock unchanged.

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

After the August increase, employment in the Fayetteville MSA represented a net gain of 2.1% relative to February 2020.  Employment in all other metro areas remains below pre-pandemic levels with the net declines having narrowed to between 1% and 2% in Fort Smith, Jonesboro, Memphis and Pine Bluff. In the remaining metro areas—Hot Springs, Little Rock and Texarkana—employment remains more than 3% lower than in February 2020.

Taking the latest data at face value, it is clear that the Fayetteville metro area—which was growing at the fastest rate before the pandemic—has experienced the most robust recovery among Arkansas’ metro areas.  Fort Smith has also shown significant improvement, with the second-lowest unemployment rate and the second-best net employment change since February 2020.  Indicators from the household survey and the payroll survey give mixed signals regarding other metro areas, but Texarkana stands out as one of the three highest unemployment rates and one of the three largest net employment declines since the onset of the COVID-19 recession.

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Arkansas Personal Income – 2021:Q2

New data from the U.S. Bureau of Economic Analysis reports that Arkansas Personal Income declined by 8.5% in the second quarter (an annualized rate of -29.8%). Nationwide, the second-quarter decrease in income was 6.0% (-21.8% annual rate). Income declines in the second quarter were the result of a sharp drop in Transfer Payments, as pandemic-related assistance programs wound down. Consequently, the states experiencing the largest declines in the second quarter income were the same as those that saw the largest increases in the first quarter. For example, Arkansas’ second-quarter decline was the 6th largest decline among the 50 states, while the 14.9% increase in the first quarter (74.5% annualized rate) was the nation’s 5th highest.  More generally, the correlation of first quarter with second-quarter growth rates across the states was -0.88.

Source: Bureau of Economic Analysis

Removing the effect of government transfer payments, personal incomes continued their robust recovery from the pandemic-related downturn a year ago.  Arkansas Personal Income less Transfer Receipts rose at a 9.6% annual rate in the second quarter, compared with a 9.2% rate in the U.S. data.  Since the trough of 2020:Q2, this measure of income has increased 10.6% in Arkansas an 10.4% in the nationwide data.

Source: Bureau of Economic Analysis

All major components of personal income except transfer receipts increased in the second quarter.  Proprietors Income surged by 16.1% and was 53.5% higher than its dismal reading of one year earlier.  Wages and Salaries rose 1.3%, for a cumulative 4-quarter change of 12.0%.  Dividends, Interest, and Rent was up 1.2% for the quarter, which represented a 1.4% increase from a year earlier.

Source: Bureau of Economic Analysis

With most government support and stimulus programs winding down, personal income is expected to return to a more normal growth pattern over the remainder of the year.

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Arkansas Retail Sales – June 2021

Arkansas Retail Sales increased by 2.5% in June, remaining well above spending levels of a year earlier and well above pre-pandemic levels as well.  Total Retail Trade and Food Service sales were up 13.0% from June 2020 and up 27.1% from the 2019:H2 average. The data for Arkansas continue to show a pattern similar to the U.S. Retail Sales data, albeit with larger net increases over the past 18 months. The U.S. data, published by the Census Bureau, showed a 0.9% increase in June. Compared to a year earlier, U.S. sales were up 18.7%—a larger increase than shown in the Arkansas data, reflecting relatively lower sales in June 2020.  Compared to the second half of 2019, U.S. Retail Sales were up 20%.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

Looking at the breakdown by industry groups, the one-month increase in sales was reflected in most components of the total, with slight declines registered at Motor Vehicle and Parts Dealers, Electronics and Appliance Stores, Food and Beverage Stores, and Health and Personal Care Stores.  Substantial increases were registered in Nonstore Retailers (which includes online retailers) and in Furniture and Home Furnishing Stores.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

Sales levels for Nonstore Retailers have skyrocketed during the pandemic as consumers turn toward online purchases as a substitute for shopping at ‘brick-and-mortar’ stores. During the second half of 2020, Arkansas purchases at nonstore retailers were running nearly 50% above pre-pandemic levels, and have surged to over 80% higher in recent months. The U.S. data show a surge of nearly 25% in late 2020, with recent sales running at a pace that is 38% higher than in the second half of 2019. (The sharp increase shown for Arkansas in July 2019 reflected the change in tax policy that required all out-of-state retailers to remit sales tax receipts, so it measures an increase in measured tax collections, rather than an actual increase in sales.)

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

Recent trends in the Furniture and Home Furnishings sector illustrate several key features of Arkansas Retail Sales growth: A sharp decline in the U.S. data measured over 50% during the recessionary trough month of April 2020, while the decline in Arkansas was only 20%. By late 2020, nationwide sales had recovered to approximately 6% above pre-pandemic levels and have surged to 21% above 2019:H2 over the most recent four months. The increases in Arkansas have persistently exceeded the U.S. averages, with sales in late 2020 up 13% and sales over the most recent four months up 38%. A sharp, but temporary decline in spending is evident in both the state and national data for February, reflecting the impact of unusually sever snowstorms that month.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

Another sector that has been particularly hard-hit by the COVID-19 pandemic is Food Services and Drinking Places. Spending at bars and restaurants plummeted during the downturn of early 2020, falling by over 50% nationwide–but only by 23% in Arkansas. By the end of 2020, bar and restaurant sales had returned to pre-pandemic levels in Arkansas, while U.S. data continued to show weak sales until spring of 2021. In June, national bar and restaurant sales had recovered into positive territory (+8.4%), while sales in Arkansas sales surged to 18.3% above pre-pandemic levels.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

County-Level Retail Sales
Month-to-month fluctuations in measured retail sales sometimes obscure the underlying trends, particularly as the geographic focus narrows to the county level. With data now in for the second quarter of 2021, we can take a look at smoothed quarterly trends. Our county-level data do not include gasoline (because there are no sales taxes on gasoline at the county level), and are not seasonally adjusted. Consequently, we’ll consider Total Retail Sales excluding Gasoline. From an index value of 100 in 2019:H2, this measure of total sales increased statewide by over 10% by the second half of 2020, and by the second quarter of 2021 had risen to about 28% above pre-pandemic levels (not seasonally adjusted).

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

The map below shows the growth rate of Retail Sales excluding Gasoline from 2019:H2 through 2020:Q2.  The color-coding shows counties with growth rates below the statewide average in reddish hues and counties with growth rates above the statewide average in greenish hues.  In all, 51 counties were above the statewide average and 24 counties below. However, the map shows that 35 counties show growth rates in the range of 24% to 32%—roughly equal to statewide growth (+/- 4 percentage points). Reds and greens are used to indicate growth rates of <24% and >32%, respectively.

Counties that have shown above-average growth tend to be clustered in the northern half of the state, particularly the north-central region.  Below-average growth rates are more predominant in the southeast of the state.  All 75 counties have higher retail sales in 2021:Q2 than pre-pandemic levels, with the growth rates ranging from +4.9% in Arkansas county to +56.7% in Fulton County.

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Documentation of Methodology is available here: Arkansas Retail Sales—A New Data Set from AEDI.

Data for Arkansas Retail and Food Service Sales for July 2017 through April 2021 are available in an Excel Spreadsheet:  Arkansas-Retail-Sales-May-2020.  The data set includes statewide aggregates and components, both seasonally adjusted and not-seasonally adjusted. County-level data for Total Retail and Food Service Sales excluding Gasoline are available on a not-seasonally adjusted basis.

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Arkansas Employment and Unemployment – August 2021

The state employment report for August had no real surprises, but was generally consistent with the ongoing trend of slowly improving labor market conditions as we emerge from the COVID-19 recession.

Data associated with the BLS Household survey was comparatively upbeat: The unemployment rate fell by one-tenth of a percentage point to 4.2% and remains a full percentage point below the U.S. average. The national unemployment rate had previously been reported to have fallen by two tenths in August to 5.2%.

Source: Bureau of Labor Statistics

The slight drop in Arkansas’ unemployment rate was undergirded by a decline in the number of unemployed (-1,761) and an increase in the number of employed (+3,412).  As a result, the labor force increased by 1,651. The number of unemployed has followed a fairly consistent downward trend since the business cycle trough of April 2020. Employment and the total Labor Force have followed a rather unusual pattern over the past year: Both showed an uncharacteristically sharp increase in December 2020, with a modest downward trend since then.

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

As shown in the figure below, the pattern of employment growth indicated by the household survey is quite a bit different from the payroll employment statistics. Both show the downturn associated with the recession from February 2020 through April 2020, although the household survey indicated a smaller initial decline. The uneven pattern of recovery shown in the household data is not at all shared by the payroll survey, which shows a relatively smooth recovery path. Large swings in the data from the household survey are often subject to being erased by data revisions, so it will not be surprising if the December 2020 jump in household employment is smoothed away when the data are revised early next year.

Source: Bureau of Labor Statistics

If we take the endpoints of the recession as being approximately accurate, the two measures both suggest that employment remained lower in August 2021 than before the recession, with a remaining shortfall of 1.5% (payroll survey) to 1.8% (household survey).

Payroll Employment
Speaking of the survey, nonfarm payroll employment was down slightly in August, falling by 1,500 (seasonally adjusted). The not-seasonally adjusted data showed an increase of 2,000 jobs, but that increase was primarily attributable to the back-to-school effect on state and local government employment (+3,100). After seasonal adjustment, state and local government employment was down by 1,300 jobs, with most of decline reflected in a seasonally adjusted downturn in local government employment.  In other words, the public school employment was smaller than is typically associated with the back-to-school effect.

Among other sectors, job losses were registered across the goods producing sectors, as well as within the categories of Trade, Transportation and Utilities. On the other hand, service-providing sectors generally showed employment gains for the month, with Leisure & Hospitality services showing a substantial increase.

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

Compared to employment levels at the previous cyclical peak (Feburary 2020), total payroll employment is down by 22,100 jobs, or 1.8%. Several sectors have emerged to show net employment increases from pre-pandemic levels, including Durable Goods Manufacturing, Retail Trade, Financial Servicesm, Professional & Business Services, and Other Services. Lagging sectors include Nondurables Manufacturing, Education & Health Services, Leisure and Hospitality Services, and Local Government.

The pace of employment recovery has slowed in recent months, but Arkansas continues to maintain a trajectory of recovery that outpaces the U.S. total.  As of August, Arkansas’ 1.8% net decline since February 2020 compares with a 3.5% remaining shortfall in the national data.

Source: Bureau of Labor Statistics

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Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

 

 

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Metro Area Employment and Unemployment – July 2021

The statewide employment data released two weeks ago showed an ongoing slow pace of recovery in Arkansas labor markets.  The unemployment rate, for example, ticked down by less than one-tenth of a percentage point (seasonally adjusted). Newly published data for metropolitan areas appear to show more significant improvement, at least in some areas of the state.  However, some of that improvement appears to be attributable to problems with the seasonal adjustment procedures for metropolitan areas—particularly in the context of data volatility during the pandemic.

As shown in the table below, unemployment rates declined across most of Arkansas’ metro areas.  In some cases the declines appear sizable.  Rates in the Fayetteville, Fort Smith, Hot Springs, Little Rock and Texarkana metro areas declined by half a percentage point or more.  Only Memphis (which includes one county in Arkansas) saw no decline in unemployment.

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

Taking the data at face value, one might be tempted to conclude that the contrast between statewide unemployment and metro area unemployment indicates that non-metropolitan areas of the state must have experienced an increase in unemployment.  However, upon closer inspection, the difference between statewide and metro area unemployment rates is actually a function of imprecise seasonal adjustment methods.  The two figures below illustrate seasonally adjusted and not-seasonally adjusted data on the number of unemployed statewide and in Northwest Arkansas (the Fayetteville-Springdale-Rogers metro area).  In both cases, the typical seasonal pattern includes an increase in unemployment in June and a subsequent decline in July.  In the statewide data, the seasonal adjustment process indicates that much of the decline in July was a typical seasonal movement, with only a slight decline in not-seasonally adjusted unemployment.  In the case of the Fayetteville metro area, however, less of the July decline was attributed to seasonal movements, and more to a decline in the seasonally adjusted data.

So how to interpret the metro area statistics relative to the statewide data?  With a grain of salt.  Data-collection and processing have been problematic during the pandemic, due to problems with survey methodology and the interpretation of unusually volatile month-to-month observations.  Over the past year, the Bureau of Labor Statistics (BLS) has worked with modified approaches to identifying “outliers” from the typical seasonal patterns, leaving greater-than-usual uncertainty about the interpretation of short-term fluctuations.  In general, the seasonal adjustment techniques used for the statewide data are more robust than the metro area data.  In fact, the seasonally adjusted data for metro area unemployment are not published as part of the BLS’s regular data-reporting programs, but are maintained on a separate page of the Bureau’s website.

So here’s what we can safely say about July unemployment in Arkansas:  The number of unemployed declined sharply, but that is typical of July in general.  In some metro areas, the declines appear to have been larger than would be anticipated for a typical July, but disentangling seasonal and cyclical components is tricky, so we shouldn’t put undue emphasis on the cyclical declines that show up in the metro area data.

From a longer run perspective, however, the picture is more clear.  Unemployment rates have fallen considerably over the past 12 months, with some of the largest declines occurring in those metro areas that experienced the sharpest increases in unemployment during the spring of 2020.  Across the state, unemployment rates remain elevated; but in Fayetteville and Fort Smith, unemployment has nearly returned to pre-pandemic levels.

Payroll Employment
Data on nonfarm payroll employment generally provide a more accurate view of labor market conditions.  The data for July appear to corroborate the indication from the household survey that Fayetteville and Fort Smith are recovering with somewhat more momentum than the rest of the state. The Fayetteville metro area is now showing employment levels above those recorded in February 2020.  Pine Bluff, which experienced proportionally smaller employment declines during the recession, has also made considerable progress toward returning to pre-pandemic conditions.  Among the other metro areas in the state, there was little change in payroll employment in July.  In most metro areas, employment remains below the levels recorded in February 2020, but the gaps remain smaller than for the nationwide average.

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

 

 

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Arkansas Retail Sales – May 2021

Arkansas Retail Sales declined slightly for a second month in May, but remained well above levels of a year ago or before the onset of the COVID-19 pandemic.  Total Retail and Food Services Sales were down 3%, following a 3.4% decline in April.  The two monthly declines only partly offset a 22% surge in March.  Data from the U.S. Census Bureau showed that national retail sales declined 1.4% in May.

Source: U.S. Census Bureau, Arkansas Economic Development Institute.

Many industry groups within the retail sector declined from recent highs, with only Motor Vehicles, Electronics and Appliance Stores, and Food & Beverage stores showing monthly increases.  All sectors except for Food and Beverage stores were well above levels of a year earlier.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute.

For both the state and national data, sharp increases in sales since May 2020 reflect the extent of weak retail spending over a year ago.  Clothing Stores, for example, showed a pandemic-related decline of more than 50% in Arkansas in April of 2020, while sales were down nearly 90% in the nationwide data.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute.

Compared to pre-pandemic sales (in the second half of 2019) sales at Clothing and Accessories Stores are up 13.7% for the U.S., and up 23.6% in Arkansas.  Nationwide, total Retail Trade and Food Service Sales are 19% higher than in 2019H2.  The same comparison shows a 24% increase for Arkansas.

The data for May include an innovation to the measurement of automobile sales data. As described in Arkansas Retail Sales—A New Data Set from AEDI, the data on county-level sales tax collections for autos yields an index of the number of vehicles.  In the past, we have converted this index to a dollar value by scaling the total so that automobile sales have the same relative weight in the state data as in the national data, with 2019 average values as a reference point.  Sales tax receipts on most goods automatically incorporate price changes (since the sales tax is an ad valorem tax), but not so with the county auto tax.  However, price spikes in the markets for new and used automobiles have recently been quite prominent.  For example, used car prices were the single largest contributor to a surge in Consumer Price Index (CPI) in May registering a monthly increase of 7.3% and a year-over-year increase of 30%.

In order to incorporate these significant price swings in the retail sales data for Arkansas, we have applied the price data for New and Used Automobiles to the index values generated from county sales tax receipts.  The valuation base remains the 2019 average.  As shown in the figure below, the incorporation of price data has little effect on the sales data until recent months.  In May 2021, the total for Motor Vehicle and Parts Dealers was up 5.8% from the previous year without price adjustment.  After accounting for price inflation, adjusted sales are up 17.9%.

Sources: U.S. Bureau of Labor Statistics, Arkansas Economic Development Institute.

After accounting for the recent surge in auto prices, the data for Arkansas and the U.S. show similar patterns.  The surge in auto sales in 2020 happened earlier in Arkansas than in the rest of the nation, and the persistent increase relative to 2019 has been somewhat larger in Arkansas.  As of May, the nationwide total for sales at Motor vehicle and Parts Dealers was up 28.7% for the U.S. and up 36.6% in Arkansas (relative to the second half of 2019).

Sources: U.S. Census Bureau, Arkansas Economic Development Institute.

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Documentation of Methodology is available here: Arkansas Retail Sales—A New Data Set from AEDI.

Data for Arkansas Retail and Food Service Sales for July 2017 through April 2021 are available in an Excel Spreadsheet:  Arkansas-Retail-Sales-May-2020.  The data set includes statewide aggregates and components, both seasonally adjusted and not-seasonally adjusted. County-level data for Total Retail and Food Service Sales excluding Gasoline are available on a not-seasonally adjusted basis.

This month’s data required on technical adjustment of note: The raw data for Garland County showed gross tax revenue of over $5 million for the sector 4441: Building Materials and Supplies Dealers. This was up from an average monthly value of about $216,000. In fact, the entire monthly tax receipts for Garland County are typically far less than $5 million, and this particular monthly report includes an unexplained “other adjustments” to  total net tax revenue that offsets most of the impact of the outlier on the county’s bottom line.  Rather than assume that the adjustment reflects a direct offset to the reported sales in sector 4441, however, we estimated a time-series model using data from the City of Hot Springs to forecast changes in Garland County sales for that sector.  (Log first-differences of the two series have a correlation coefficient of 0.939.)

 

 

 

 

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Arkansas Employment and Unemployment – July 2021

Arkansas labor markets continued their snails’-pace recovery in July. The official unemployment rate declined by one-tenth of a percent, to 4.3%, but that change was essentially within the range of rounding error. From March through July, Arkansas’ unemployment rate showed a cumulative decline of 0.075 percentage points. The national unemployment rate dropped by 0.5 percentage points in July, but at 5.4% remains more than a full percentage point higher than Arkansas.

Source: Bureau of Labor Statistics

The underlying statistics from the household survey showed that the number of unemployed declined by nearly 1,000, but the number of employed also declined, falling by 1,591. As a result, the labor force continued to slide lower, falling by 2,542 in July.

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

Relative to the pre-pandemic month of February 2020, the number of unemployed is up by 6,933, while the number of employed is down by 23,247 (about 1.8%).

Payroll Employment
Nonfarm payroll employment increased by 3,700 in July and the estimate for June was revised upward by 1,700 jobs (seasonally adjusted data). Not-seasonally adjusted data showed a decline of nearly 15,000 jobs in July, but most of that decline was attributable to the lower employment in Education and Local Government associated with schools’ summer break. After seasonal adjustment, the number of jobs in Education & Health Services and Government both registered increases. Most sectors showed small changes for the month, although Construction fell by 1,000 jobs. Employment in Manufacturing was higher overall, but the gains were entirely in durable goods production, with employment in nondurable manufacturing continuing to drift lower.

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

Compared to pre-pandemic employment levels, durable goods manufacturing is up by 5,500 jobs, while jobs in the nondurable goods are down 5,400.  In total, payroll employment is down 25,600 from its level in February 2020, with most of the losses concentrated in Education & Health Services, Leisure & Hospitality Services, and Government.

The net decline of 25,600 jobs since February 2020 amounts to a percentage decline of 1.7%.  In comparison, payroll employment nationwide remains 3.7% lower than pre-pandemic levels.

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 consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

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Metro Area Employment and Unemployment – June 2021

The statewide employment data for June showed little change in Arkansas labor market conditions, and the newly-released data for metropolitan areas consistent with that conclusion.  On a not-seasonally adjusted basis, unemployment rates in Arkansas metro areas rose by 0.4 to 1.2 percentage points, but those changes were typical for June (after the school-year ends).  After seasonable adjustment unemployment rates in Arkansas metro areas were generally unchanged.  The unemployment rate ticked up one-tenth percent in Memphis and down two-tenths in Fort Smith, but was unchanged elsewhere.

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

Compared to a year ago, unemployment rates were down significantly across the state, with the largest declines tending to be in those metro areas (and counties) that saw the largest spikes in 2020.  Compared to pre-pandemic levels in February 2020, unemployment rates are running about one to two percentage points higher in metro areas.

Payroll Employment
Changes in nonfarm payroll employment were mixed.  Employment was higher in five of Arkansas’ metro areas, down slightly in Fort Smith, and unchanged in Jonesboro and Little Rock.  Compared to June 2021, employment has recovered considerably in all metro areas, but remains lower than pre-pandemic levels.  With the monthly increase in June, payrolls in the Fayetteville metro area had nearly recovered to the February 2020 reading.  In other metro areas, the net declines range from -1.8% in Fort Smith to -3.8 in Little Rock.

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

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Arkansas Retail Sales – March & April 2021

After a brief weather-related contraction in February, consumer spending surged in March and remained elevated in April.  Data for Arkansas Retail Sales shows that spending patterns in our state are matching the national data, with even larger increases relative to pre-pandemic levels.*

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

Severe snowstorms hit Arkansas relatively hard in February, but March saw a rebound amounting to a 22% increase for the month, nearly doubling the 11.3% surge in U.S. Retail Sales.  Sales in every three-digit industry group showed sharp increases, ranging from 7.5% at Food & Beverage Stores to 48% at Clothing Stores.  The relative magnitude of increase across sectors was similar in the nationwide data, with the largest increases tending to be associated with the sectors that experienced larger declines in February.  In April, Arkansas Retail Sales were down nearly 4%, but remained well above recent levels.  Gains and losses were mixed, but sharp declines in Motor Vehicle and Parts Dealers, Electronics and Appliance Stores and Food and Beverage Stores.  The decline in the Motor Vehicle sector is likely overstated: data limitations inhibit our ability to measure and incorporate recent increases in new and used car prices into the data.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

As indicated in the chart for total Retail and Food Services Sales above, consumer spending is far higher now then before the COVID-19 pandemic struck the economy in March 2020.  As measured from a baseline of July-December 2019, the average for March and April 2021 is up over 20% for the U.S. and up nearly 29% in Arkansas.  In both the state and national data, increases are widespread across Retail Trade sectors, but remain lower at bars and restaurants—at least in the nationwide data.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

Here in Arkansas, however, sales at Food Service and Drinking Places had been running at nearly the same pace as late 2019 for several months, and the March-April spending surge pushed total spending well above pre-pandemic levels:  In April, sales at Arkansas bars and restaurants were 16% higher than in late 2019.  Nationwide, spending at bars and restaurants recovered to pre-pandemic levels for the first time.

Sources: U.S. Census Bureau, Arkansas Economic Development Institute

At the county level, our data covers Retail Sales excluding gasoline stations (not seasonally adjusted).  As shown in the interactive map below, there is no county left behind when it comes to rising consumer spending.  Again comparing March-April averages to levels in the second half of 2019, Prairie and Arkansas Counties have shown the smallest increases, up 7.5% and 11.6% respectively.  At the other extreme, Woodruff County was up 49.4% and Fulton County was up 54.5%.  The median growth among counties was 36.1%.

# # #

Documentation of Methodology is available here: Arkansas Retail Sales—A New Data Set from AEDI.

Data for Arkansas Retail and Food Service Sales for July 2017 through April 2021 are available in an Excel Spreadsheet:  Arkansas-Retail-Sales-Apr-2020.  The data set includes statewide aggregates and components, both seasonally adjusted and not-seasonally adjusted. County-level data for Total Retail and Food Service Sales excluding Gasoline are available on a not-seasonally adjusted basis.

*Technical Note:  The methodology for calculating Retail Sales for Saline County has been updated to incorporate the county-level sales tax that was implemented in April 2019.  In earlier versions of the data set, we used aggregates of sales tax collections for the cities of Saline County, scaled to approximate total county-wide spending.  Actual county-level data are now used for the period December 2019 forward, with scaled sum-of-cities data (for each three-digit industry group separately) spliced to cover the period July 2017 through November 2019.

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Special Reports: Impact of Covid-19 on the Arkansas Economy

Arkansas Consumer Spending in 2020
One of the most significant and unexpected features of the Arkansas economy during the COVID-19 pandemic has been the robust behavior of consumer spending…
Read more…

Leisure and Hospitality Industries in Arkansas–2020
Of all the sectors of the economy hat have been disrupted by the COVID-19 pandemic, industries in the Leisure and Hospitality category have been among the hardest-hit…
Read more…

Forecast Update (July)
“Incoming data have continued to show a more rapid recovery from the COVID-19 shutdowns than previously expected.”
Read more…

Forecast Update (June)
Information since May has suggested that Arkansas has not been as severely impacted as other parts of the country, and that the sharp declines in national employment have abated.
Read more…

Forecast Update (May)
“The economic impact of the COVID-19 pandemic continues to be more rapid and more severe than initially expected… In this updated report we present new projections for the Arkansas economy.”
Read more…

Forecast Update (April)
“In this note we update that forecast with new estimates of the magnitude of the downturn. We also update and extend our previous guidance on how the forecast is likely to impact sales tax receipts of local governments.”
Read more …

Implications for Local Government Sales Tax Collections
“In this note, we focus on consumer spending and the outlook for sales tax collections by county and municipal governments.” Read more…

Arkansas Economic Outlook (March)
“It appears that a dramatic downturn in economic activity over the remainder of 2020 is unavoidable for the nation and for Arkansas.”  Read more…

 

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