A proxy for state retail spending, Arkansas Taxable Sales (ATS), increased by 0.2% in the third quarter of 2013 (seasonally adjusted). Compared to the previous year, ATS was up 1.0%. Arkansas Taxable Sales Including Gasoline (ATSIG) also rose by 0.2% for the quarter and was up 0.9% compared the third quarter of 2013. The slightly slower year-over-year growth rate for ATSIG reflects the effect of lower gasoline prices on total household spending. Since the trough of the recession, ATS has increased by 15.8% — an average annual percentage rate of 2.8%. Meanwhile, ATSIG increased by 18.0% — or 3.2% annually.
Over the past four quarters, the price index for personal consumption expenditures has increased by about 1.5%. Accordingly, the 1.0% (0.9%) rate of increase in ATS (ATSIG) translates to negative growth after adjusting for inflation. As shown in the figure below, real inflation-adjusted growth in ATS and ATSIG has been considerably slower than their actual dollar amounts. Both measures remain below their pre-recession levels, having increased by a total of 5.8% (ATS) and 7.8% (ATSIG) since the trough of the recession.
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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 2014:Q3 (Excel file).