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Arkansas Home Sales – 2012:Q2

The Arkansas Realtors® Association gave us a two-for-one special yesterday:  home sales statistics for both May and June.  Compared to the previous year, sales of new and existing homes were up 7.3% in May and up 0.2% in June.  As shown in the figure below, sales are showing their typical seasonal increase for the two months, but the trajectory shows little apparent improvement over the weak sales totals we saw last year.  For the first six months of the year, total sales were 11,687, up 4.3% from the 2011 pace.

Source: Arkansas Realtors® Association

The slow rate of increase in home sales is illustrated even more clearly after the data are seasonally adjusted.  As shown in the figure below, monthly sales have been hovering near the 2,000 per month pace for the past several months.  Relative to that trend, however, the months of February and April were particularly weak.  After seasonal adjustment, the sales pace in June was running right at the 2000/month rate.

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Month-to-month changes in home sales can be subject to short-run idiosyncratic developments, so it is helpful to look at quarterly average figures to get a better sense of trends.  With April and May running below trend, the sales total for the second quarter declined from its first-quarter pace.

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Our most recent forecast for 2012 home sales was 25,000, up 7.5% from 2011.  If sales are to reach that total, we’ll have to see some improvement in the second half of the year.  Given the usual seasonal pattern of home sales, the months of July and August will be crucial.

Arkansas Employment and Unemployment – June 2012

The unemployment rate in Arkansas ticked downward from 7.3% in May to 7.2% in June.  According to the report from the Bureau of Labor Statistics (BLS), Arkansas was one of only 11 states to see a declining unemployment rate for the month.  Twenty-seven states recorded increases, and 12 states had no change.  The number of unemployed Arkansans declined by 1,884, falling to 99,185.  This was the first time Arkansas unemployment has fallen below 100,000 since February 2009.

The news from the household survey was not entirely positive, however.  The number of employed declined by 2,369 in June after showing essentially no change in the previous month.  As a result, the Arkansas labor force contracted by 4,253 — the first monthly downturn since July 2011.  Over the past several months, the combination of declining unemployment and an expanding labor force had distinguished Arkansas as one of the states where labor markets seemed to be outperforming the national average.

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

Data from the employer survey confirmed the weakness in employment growth for the month.  Nonfarm payrolls were down 4,300 from the previous month (seasonally adjusted).  Most sectors of the economy experienced job losses, with the notable exception of Education & Health Services, which saw an increase of 2,000 jobs.  Leisure & Hospitality Services, Financial Services, and Wholesale trade also showed slight increases.

On a year-over-year basis, the seasonally adjusted figures show a net increase of 6,900 jobs since June 2011, with gains concentrated in Education & Health Services, and Leisure & Hospitality Services.  Employment in goods-producing sectors continues to languish:  Construction employment was down 3,000 from the previous year, and Manufacturing employment was down by 1,800.

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

As recently reported here at the Arkansas Economist, the latest data from the Quarterly Census of Employment and Wages (QCEW) seems to be indicating that the payroll employment data will eventually be revised upward.  Specifically, the QCEW data show must stronger job growth in the latter part of 2011 than current employment reports have indicated.  If we take these likely revisions into account, payroll employment from June 2011 through June 2012 has expanded by over 16,000 instead of the 6,900 implied by today’s report.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

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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, are available here:  Table – Seasonally Adjusted NFPE.

Employment in Arkansas – Reconciling the Accounts

Over the past several months, the Arkansas employment reports have been providing mixed signals.  On the one hand, the unemployment rate has declined dramatically as household employment has risen.  Meanwhile, the payroll employment statistics have shown rather sluggish growth rates.  The chart below compares these two measures of employment.  Although they are compiled from different surveys and measure slightly different concept of employment, the overall patterns of the two series are quite similar.*  The difference between growth rates over the past several months is apparent, however.  From May 2011 through May 2012, household employment has increased by 2.6% while payroll employment has gained only 0.6%.

Source: Bureau of Labor Statistics

A third data source helps to reconcile these two divergent series.  The Quarterly Census of Employment and Wages (QCEW) represents a more comprehensive and accurate version of the payroll employment statistics.  In fact, the statistics from the QCEW represent the source-data for annual revisions of the payroll employment figures.  These revisions are often substantial (see here and here, for example).

Although we are still a long way from the annual revisions, the latest data from the QCEW already suggest that there will be large revisions to payroll employment statistics for the second half of 2011.  Using some simple statistical techniques to estimate the magnitude of the eventual data revisions, it appears that cumulative revisions to the end of 2011 will result in an employment level more than 11,000 higher than currently-published statistics.  The upward revision for October alone is expected to be more than 18,000.  As shown in figure below, the anticipated revision will raise the growth profile of payroll employment substantially.  With these estimated revisions included, payroll employment growth from May 2010 to May 2011 amounts to 1.5%, narrowing the observed gap between houshold and payroll employment growth.

Sources: Bureau of Labor Statistics, Institute for Economic Advancement

Because the actual benchmark revision will use QCEW data through the first quarter of 2012, the magnitude of the ultimate payroll data revision may end up being even larger.  What we can say for sure at this point is this:  The relatively weak growth of payroll employment observed over the past year is largely the result of preliminary data that under-measure the true extent of Arkansas employment growth.

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*The household employment statistics are based on survey measures and local economic models, and are compiled under the Local Area Unemployment Statistics (LAUS) program.  The payroll data are based on a survey of firms, and are published as part of the Current Employment Statistics (CES) program.

County Employment and Wages – 2011

This morning, the Bureau of Labor Statistics (BLS) released the latest information from the Quarterly Census of Employment and Wages (QCEW), covering the final quarter of 2011.  Although it is not as timely as the monthly employment statistics that are published under the Current Employment Statistics (CES) program, the QCEW report is more detailed and considered to be far more accurate.  One main attraction of the QCEW is that it presents employment and wage statistics for individual counties.  For the 75 counties of Arkansas, today’s report shows a fairly wide range of labor-market conditions across the state.

For employment growth, the QCEW shows a statewide growth rate of +1.0% from the fourth quarter of 2010 through the fourth quarter of 2011.  As shown in the map below, county employment growth rates ranged from -11.0% in Calhoun County to +11.2% in Hot Spring County.  The highest-growth counties are scattered around the state, but tend to cluster near the four corners of Arkansas.  Slower growing counties are concentrated in the south-central and north-central portions of the state.   A total of 30 counties experinced declines in employment and 44 showed positive growth.  Employment in Lawrence County was unchanged.

Mapping services provided by the GIS Applications Laboratory at the Institute for Economic Advancement.

Today’s report also included information on average weekly wages.  The statewide figures showed a decline of 1.2% for the year.  Growth rates for individual counties ranged from -13.9% in Bradley County to +21.4% in Stone County.  No clear pattern of wage changes is evident across the state, but many of the counties that saw positive wage growth are in the northern part of the state (although a handful of counties in the south and southwest also showed wage gains).  Nearly all of the counties across the center of the state (from Sebastian County in the east to Mississippi County in the west) experienced declining wages.  In all, 52 counties saw negative wage growth, 21 had postive growth rates, and wages in two counties (Hempstead and Newton) were unchanged.

Mapping services provided by the GIS Applications Laboratory at the Institute for Economic Advancement.

Regular readers of the Arkansas Economist will recall that data from the QCEW are used in the annual benchmark revisions of the Current Employment Statistics (the regular monthly reports on state and metro-area payroll employment).  Although the annual revisions will not be released until March of 2013 — and will incorporate information from the 2012:Q1 QCEW report — the information published today suggests that the next revision will (once again) be substantial.  Stay tuned for more information on that topic in the coming days.

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Note:  PDF files of the maps presented above are available here:   Covered Employment Growth,   Average Weekly Wages .

Metro Area Unemployment Rates – May 2012

The Bureau of Labor Statistics reported today that unemployment rates in May were lower than a year earlier in 331 of the nation’s 372 metropolitan areas.  All of the metro areas in Arkansas fell into this category.  Year-over-year changes ranged from -0.4 percentage points in Northwest Arkansas to    -1.1 percent in Memphis.

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

The reported unemployment rates were all up sharply from the previous month, but this largely reflects regular seasonal patterns.  According to the smoothed seasonally adjusted estimates released this afternoon, unemployment rates in May were largely unchanged from April.

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

 Payroll Employment

Today’s report from the BLS also noted that nonfarm payroll employment in May was up from the previous year in 266 metro areas.  Four of the state’s metro areas were included in this total.  The largest year-over-year percentage increase was recorded in Texarkana (+4.4%).  At the other extreme, payroll employment in Fort Smith was down 4.4%.  From April to May, payrolls were up in only three metro areas:  Little Rock (+0.7%), Pine Bluff (+0.8%) and Texarkana (+1.7%).

Source: Bureau of Labor Statistics (Current Employment Statistics)

 

Arkansas Personal Income – 2012:Q1

Personal incomes in Arkansas rose slightly in the first quarter, up 0.3% from the fourth quarter of 2011 (seasonally adjusted).  According to the report from the Bureau of Economic Analysis, Arkansas’ growth rate was the slowest among all the positive growth rates in the nation — although three states showed zero or negative growth.  On a year-over-year basis, income growth was 2.4%, ranking Arkansas #40 among the 50 states plus D.C.  By comparison, total U.S. personal income was up 0.8% from the previous quarter and up 2.9% from a year ago.  As shown in the chart below, Arkansas Personal Income is now approximately 6% higher than the peak recorded at the beginning of the recession.

Source: Bureau of Economic Analysis

A sharp decline in farm incomes for the quarter–down by over 28% from the previous quarter–contributed to the overall weakness in the report.  Nonfarm incomes were  up by 0.6%.

Total earnings–which include wage and salary disbursements, supplements to wages and salaries, and proprietors’ income–were essentially unchanged for the quarter (+0.04%).  In addition to the substantial drop in farm incomes, a large decline was also evident in Real estate and rental and leasing (-13.76%).  These two sectors combined had a net contribution of -0.55 percentage points to total personal income growth.  As shown in the table below, a handful of industries generated fairly robust income gains, including Accommodation and food services, Management of companies and enterprises, Construction, and Transportation and warehousing.

Source: Bureau of Economic Analysis

Note:  Today’s income report also included data revisions for 2011.  These changes were very small for Arkansas, but did result in a slight upward revision to growth in the fourth quarter.  The new data show an increase of 0.7%, compared to a previously-reported growth rate of 0.6%.

Arkansas Employment & Unemployment in May: No Change

New data from the U.S. Bureau of Labor Statistics (BLS) and the Arkansas Department of Workforce Services (DWS) show that the unemployment rate ticked up one-tenth of a percentage point in May.  However, it would be more accurate to say the the rate was unchanged for the month:  Calculated out to the second decimal point, the unemployment rate rose from 7.24% to 7.27% — not nearly enough to be considered statistically significant.  Changes in the number of employed (-52) and unemployed (+329) were far too small to be considered meaningful in any quantitative sense.  Since hitting a high-point in July 2011, the number of unemployed in Arkansas is down by more than 10,000 and the number of employed is up by nearly 36,000.

Source: Bureau of Labor Statistics

The statistics on Arkansas nonfarm payroll employment in May can be similarly characterized:  weak, but not significantly so.  For the month, total nonfarm payroll jobs were down by 1,000 (seasonally adjusted).  Meanwhile, the data for April were revised up by 1,400 jobs, so today’s statistics actually show a net increase compared to last month’s reported figures.  Compared to May 2011, the payroll report showed a gain of 6,500 jobs.  After briefly rising above 1.17 million jobs in June of 2010 and again in April 2011, this month’s report is the first since the recession to show two consecutive months above that threshold.

Source: Bureau of Labor Statistics

Sectors losing jobs in May included Retail Trade (-2,700), Leisure & Hospitality Services (-700), and Construction (-500).  Sectors gaining jobs included Professional & Business Services (+1,400), Manufacturing (+1,100),  and Government (+900).  The increase in Government employment was almost exclusively in the category of Local Government.  Compared to May 2011, employment is down in several sectors, including Construction, Manufacturing, Retail Trade, Financial Services and Professional & Business Services.  The year-over-year total job growth has been concentrated in the service sectors of Education & Health, Leisure and Hospitality, and Government (especially Local Government).  From the start of the recession in December 2007, total employment in Arkansas is still down by over 37,000 jobs.

Source: Bureau of Labor Statistics

After two months of relatively weak employment reports on the national level, it is not surprising that the data for Arkansas employment in May are disappointing.  Nevertheless, the statistics do not indicate a downturn in the state’s labor market conditions;  Rather, they appear to represent a brief stalling of the upward momentum we’ve seen over the past several months.

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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, are available here:  Table – Seasonally Adjusted NFPE.

Update: Arkansas Taxable Sales – 2012:Q1

Final data are now in for first-quarter taxable sales.  The quarterly growth of taxable sales in the first quarter was slightly weaker than was indicated by the preliminary report, but sales continue to show strong year-over-year growth.   Excluding gasoline sales, Arkansas Taxable Sales (ATS) was up 1.3% for the quarter — and 5.2% higher than the first quarter of 2011.  With higher gas prices in the first quarter boosting overall fuel expenditures Arkansas Taxable Sales Including Gasoline (ATSIG) was up 2.0% for the quarter and is 5.8% higher than the previous year.  Over the past three quarters, ATSIG has been growing at an annual rate of 7 to 8%.

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

Preliminary information for April shows a decline from the previous month, but longer term trend show continued robust growth.  From March to April, ATSIG declined by 0.4% (seasonally adjusted).  Compared to April of 2011, however, ATSIG was up 5.9%.

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

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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 data is available here: Arkansas Taxable Sales Data 2012:Q1 (Excel file)

 

State GDP in 2011

The Bureau of Economic Analysis released state-level GDP estimates for 2011 this morning.  The data show that Arkansas GDP grew at a relatively modest rate of 0.3% last year.  The comparable growth rate for the U.S. was 1.5%.  Arkansas’ growth rate ranked #39 in the nation.

The breakdown of growth rates by sector reveal a clear source of the relative weakness in Arkansas’ economy in 2011:  Agricultural output (including forestry, fishing and hunting) declined by over 16% last year.  The direct contribution to the state’s GDP growth was a reduction of nearly 0.5 percentage points.  In a state like Arkansas where agriculture comprises a relatively large share of economic activity, weakness in the agricultural sector generates secondary, induced effects in other areas of the economy.

Source: Bureau of Economic Analysis

Weather conditions in Arkansas during 2011 were suboptimal to say the least — spring storms and flooding, followed by summer heat and drought, were responsible for a sharp drop in farm incomes.  The good news is that weather is temporary, so the relative slowdown in Arkansas economic growth during 2011 is unlikely to be a persistent problem.

The new report also included revisions to state GDP figures for the previous four years.  As indicated in the chart below, the revised figures show that the recessionary downturn in 2009 was far larger than previously reported.  The revised figure of -2.9% is nearly twice as large as the estimate published last year (-1.5%).   On the other hand, the latest data show a sharper rebound in economic activity during 2010.  The new figures show an expansion of 2.5%, revised upward from the previously-reported rate of 2.3%.

Source: Bureau of Economic Analysis

Today’s GDP report is consistent with other sources of information (e.g. employment, personal income, taxable sales) that indicated a slowdown in the pace of the economic recovery in Arkansas last year.  These indicators have been showing noticeable improvement for the latter part of 2011 and the first part of 2012, suggesting that the GDP slowdown last year represented only a temporary setback.

Metro Area Unemployment Rates – April 2012

The Bureau of Labor Statistics reported today that unemployment rates in Arkansas metro areas were down sharply in April compared to a year earlier.  Year-over-year changes ranged from -0.5 percentage points in Little Rock to -1.4 percent in Memphis.  Broadly speaking, the metro areas with the highest unemployment rates a year ago have seen the largest declines over the past 12 months.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Smoothed seasonally adjusted estimates for April showed monthly unemployment-rate declines in every metro area except Hot Springs, where the rate was unchanged.  Unemployment was down by 0.2% in  Fort Smith, Pine Bluff, and Texarkana.  Declines of 0.1% were recorded for Fayetteville, Jonesboro, Little Rock, and Memphis.
Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

As shown in the chart below, the latest data continue to follow a clear trend of improving employment conditions across the state.

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