Personal income data for the fourth quarter of 2025 report another relatively weak quarter of growth for Arkansas. On an annualized basis, Arkansas personal income expanded at a 0.7% rate, compared to 3.4% for the U.S. average.
Arkansas and the rest of the nation have seen slowing income growth in 2025. After a strong first quarter, Arkansas growth rate for the rest of the year averaged below 1%. The U.S. growth rate has slowed as well, although not so dramatically.
A breakdown of the components of personal income growth shows ongoing growth in Wages & Salaries; Dividends, Interest & Rent; and Transfer Receipts. The category most responsible for suppressing earnings growth was Proprietors’ Income.
Regular readers of the Arkansas Economist should be able to guess the underlying source of weakness in Proprietors’ Income in the fourth quarter: Farm Income. The farm component of proprietors income, while accounting for only a small fraction of personal income, has been exhibiting highly variable growth patterns in recent years. As illustrated in the figure below, Non-farm Proprietors’ Income has been expanding steadily (albeit at a decelerating rate), while Farm Proprietors’ income drive the major fluctuations overall.
Some of the quarterly volatility in personal income growth can be smoothed by considering four-quarter moving-average growth rates. Adjusting total income growth to exclude farm income reveals an even steadier growth trend. Income growth has been slowing nationwide and the smoothed trend for Arkansas shows roughly similar pattern.
Over the longer-run, Personal Income growth since the beginning of 2020 has cumulatively totaled 41.2% for the U.S. and 43.2% in Arkansas.
