Arkansas Real GDP expanded at an annual rate of 2.1% in the first quarter of 2026. The U.S. growth rate was also 2.1% (revised upward from previous estimates).
Source: Bureau of Economic Analysis
A breakdown of the contributions to growth by sectors showed a notable contribution from the agricultural sector, consistent with the data in today’s personal income report. Manufacturing was also a strong contributor to Arkansas’ growth. Wholesale and Retail trade both showed declines for the quarter, as did Finance & Insurance.
Source: Bureau of Economic Analysis
Compared to the first quarter of 2025, Arkansas GDP was up by 1.8%, while the U.S. increase was 2.7%. If we remove the volatile agricultural component, Arkansas growth rate matches that of the U.S.
As discussed last week with regard to state payroll employment, this year’s annual benchmark revisions were unusually extensive for Arkansas. Typically, the published monthly data reported in Current Economic Statistics (CES) are revised by aligning the series with the more accurate benchmark data from the Quarterly Census of Employment and Wages (QCEW). The QCEW is based on state unemployment insurance records, so it is often referred to as “covered employment.”
This year, there was also a refinement of the methodology for estimating non-covered employment. The impact of that modification was then back-cast all the way to the beginning of the data series, 1990. For observations over the past several years, this revision had the effect of lowering the entire path of the data, but presumably leaves the short-run growth rates and fluctuations intact. In that sense, the shift in series levels had no significant economic effect.
For Arkansas metro areas, the level-shift portion of the revision affected Fayetteville-Springdale-Rogers, Fort Smith, and Little Rock-North Little Rock-Conway. There was no evident longer-term revisions for Hot Springs, Jonesboro, Memphis, or Texarkana (although seasonal factors were re-estimated for all series).
In order to identify the revisions due to the literal re-benching of the series to QCEW data, we can express the pre-revision and post-revision series as indexes, where the two series are aligned as of a certain date. As we have done in past analysis, we will use February 2020 as the reference point. The figures below illustrate the nature of the benchmark revisions that affected recent growth rates and trends.
Source: Bureau of Labor Statistics
The impacts of these revisions on recent growth trends are summarized in the table below. Among the one-year growth rates, all metro areas except for Jonesboro and Hot Springs showed downward revisions. Over the longer span—since February 2020—only Hot Springs and Little Rock were revised higher. For Memphis and Texarkana, the revisions changed positive growth figures into negatives—over both time horizons.
Source: Bureau of Labor Statistics
Latest Data The newest data released last week covered January 2026. With the revised history now incorporated into the data, the chart and table below summarize the most recent growth rates and trends.
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.
Source: Bureau of Economic Analysis
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.
Source: Bureau of Economic Analysis
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.
Source: Bureau of Economic Analysis
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.
Source: Bureau of Economic Analysis
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.
After longer-than-usual delays associated with federal government shutdowns last year, the Bureau of Labor Statistics finally released new state-level employment data for January 2026, along with the annual data revisions. In general, the revised and updated data paint a picture of weaker labor market conditions than were indicated by the unrevised data.
A case in point is Arkansas’ unemployment rate. As shown in the figure below, the pre-revision data was showing a gradual increase in unemployment during the second half of 2024 and through all of 2025. After revision, we see that the increase in unemployment took place more rapidly during 2025 than originally estimated. By the end of the year, the unrevised data a state unemployment rate of 4.2%, with a revised figure for December of 4.3%. Although this is a relatively small revision for December, the data for the summer months was revised to show unemployment rates as much as 0.4% higher than originally published.
The new information for January 2026 shows an unemployment rate of 4.4%, one-tenth of a percentage point higher than the U.S. average (although the difference is not statistically significant).
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Payroll Employment Nonfarm payroll employment was also subject to annual benchmark revisions (discussed below). For January, payroll employment increased by 1,800 jobs (seasonally adjusted, revised data). As shown in the table, most sectors saw employment gains, with the exception of Construction, Retail Trade, and Leisure & Hospitality Services.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
Over the past year, most sectors have experienced employment growth, with an overall increase of 11,600 jobs (approximately 0.9%). particularly notable are declining employment figures for Construction and Manufacturing. For manufacturing (both durable and nondurable goods), the newly revised data show that employment is lower now than it was prior to the onset of the COVID pandemic. This is a revelation that stems from the new data revisions.
Payroll Data Revisions The annual benchmark revisions for nonfarm payroll employment were significantly larger than usual–at least for Arkansas. As of December 2025, the new total for payroll employment is 3.7% lower than previously reported. This was the largest revision among the 50 states plus District of Columbia.
A significant share of the downward revision was attributable to a rebasing of the entire employment series. Data as far back as 1990 was revised significantly lower, affecting the level of employment not just for recent years, but throughout the entire history of employment data for the state. An inquiry to the Arkansas Division of Workforce Services yielded an explanation that this source of revision had to do with the way non-covered employment was calculated (i.e., employment not subject to unemployment insurance). Because these revisions shifted the level of the entire structure of employment over 36 years, this source of revision is not economically significant. That is, the changes have little impact on recent employment growth trends.
On the other hand, the usual benchmarking process that uses updated source data over the past two years was also larger than usual. Of particular note were revisions to employment growth in manufacturing. As shown in the figures below, growth over the past 15-18 months has been considerably slower than previously reported. From October 2024 through December 2025, the originally-published data showed an increase of 1.9% for durable goods employment and 1.2% for nondurable goods employment. After revision the new series show a decline of 3.5% for durable goods, and zero net change in nondurable goods.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
The other goods-producing sector that has shown declining employment over the past 12 months, construction, had a different revision pattern. Although construction employment has been declining for the past 18 months, the revised data show the decline to be attenuated relative to the originally-published figures.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
In order to control for the long-term rebasing of the series back to 1990, we can examine the employment index that we usually use to compare growth trends in Arkansas with the U.S. By using index values using the pre-COVID month of February 2020 as a base period, it is possible to compare trends before and after revision with the total U.S. equivalent. As shown below, the newly revised data show a slower recovery of employment from mid-2020 through 2022, as well as a slower growth trend in 2024 and 2025. Overall, the revised data show employment in December 2025 was 6.3% higher than in February 2020, while the previously-published data had shown 7.7% growth over that period.
The Figure below shows year over year growth rates for 2023-2025. The new revisions have the effect of raising Arkansas employment growth in 2023 (from 1.2% to 1.8%), and lowering growth in 2024 and 2025. Notably, the revised Arkansas employment data show higher growth rates than the U.S. over all three years. In particular, even the 0.65% growth rate in 2025 outpaces the near-zero growth for the U.S. total.
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.
Arkansas metropolitan areas ended the year 2025 with rising unemployment rates, juxtaposed against a backdrop of employment growth that is slowing in some parts of the state but continuing to expand in other areas.
In December, unemployment rates were either unchanged or slightly higher than the previous month. Over the past several months, the rise in unemployment has been significant, with rates increasing by 0.4 to 0.7 percentage points in just the second half of the year (with the notable exception of Memphis, which has maintained a relatively steady unemployment rate).
Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates
Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates
Payroll Employment Nonfarm payroll employment changes were mixed in December. Fort smith, Hot Springs, Memphis and Texarkana experienced declining employment for the month, while Northwest Arkansas, Central Arkansas, and Jonesboro registered employment gains.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
The pattern of relative growth rates is evident in longer term trends as well. Northwest Arkansas has consistently shown the strongest job growth in the state, with Central Arkansas and Jonesboro maintaining relatively strong growth rates as well. Over the most recent 12 months, Texarkana has also trended higher. Fort Smith, Hot Springs, and Texarkana have grown relatively slowly over the past five years, increasing by only one or two percent relative to February 2020.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
County Unemployment Rates An end-of-year snapshot of unemployment rates around the state shows a typical pattern. The areas of high unemployment are concentrated in the southeast, with some high-unemployment counties in north-central Arkansas as well. In and around the rapidly growing metropolitan areas, unemployment rates remain below 4%.
After a string of strong GDP reports since the second half of 2024, the latest report on Arkansas GDP was disappointing. In the second quarter of 2025, Arkansas GDP declined at an annualized rate of 1.1%. Arkansas was one of two states (along with Mississippi) that showed negative growth for the quarter. The U.S. GDP growth rate in the second quarter was 3.8%.
Source: Bureau of Economic Analysis
Not surprisingly, the second-quarter weakness was almost entirely attributable to the volatile agricultural sector. In fact, varying conditions in farm output were responsible for both extremes of state GDP growth across the nation. According to the news release from the Bureau of Economic Analysis, the agriculture sector “was the leading contributor to growth in six states including Kansas, the state with the third-largest increase in real GDP. In contrast, this industry was the leading offset to growth in six states including Arkansas and Mississippi, the two states where real GDP declined.”
The table of contributions to GDP growth by sector, below, illustrates the dramatic impact of the agricultural sector decline in the second quarter. Were it not for agriculture, Arkansas GDP would have risen by over 2.7%.
Source: Bureau of Economic Analysis
Annual Revisions Today’s report also included annual updates and revisions to GDP and Personal Income data. As shown in the figure below, data for Arkansas were subject to notable revisions in both directions in the quarterly data. Notably, the quarterly growth rates for the third and fourth quarters of 2024 were revised down. In the original data releases, Arkansas was the fastest growth state in both quarters. After revision, the lower growth estimates knocked the state’s ranking down, although it remained on the top ten list in both quarters.
Source: Bureau of Economic Analysis
The magnitude of revisions was, for some sectors, substantial. Overall, the cumulative revisions marked down Arkansas’ first quarter GDP by 0.9%. Utilities and manufacturing were particularly hard hit. On the other hand, Management of companies and enterprises was revised significantly higher.
The report on state-level employment for July 2025 indicated that Arkansas continues along a relatively steady growth path. The Arkansas unemployment rate was unchanged at 3.7% and the labor force participation rate was unchanged at 58.4%. Those key indicators of labor market activity have shown no significant change over the course of 2025. Meanwhile, Arkansas payroll employment continued to expand in July—albeit with a notable downward revision to the data for June.
The national employment report released on August 1 showed the U.S. unemployment rate ticking up to 4.2% from 4.1% in June. Other than the brief dip in June, the national unemployment rate has been stable for five months. Meanwhile the Arkansas unemployment rate has remained steady at 3.4%.
Source: Bureau of Labor Statistics
While the unemployment rate has been unchanged since March, the number of unemployed has been trending higher, rising from 50,588 in March to 53,049 in July. Meanwhile, employment and the labor force have been expanding in tandem, resulting in no change in the ratio of the unemployment to the labor force (the unemployment rate). In July, the number of unemployed increased by 347 and the number of employed was up 556, resulting in a labor force increase of 903.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Similarly, the Arkansas labor force has expanded in tandem with population in recent months, resulting in a labor force participation rate that has been steady at 58.4% since January. Arkansas’ labor force participation rate has increased from 57.8% to 58.4% since July 2024. Over the same period, the U.S. participation rate has trended modestly lower, dropping from 62.6% in July 2024 to 62.2% in July 2025.
Source: Bureau of Labor Statistics
Payroll Employment Arkansas nonfarm payroll employment increased by 4,600 in July (seasonally adjusted). When the national employment statistics were released on August 1, the slow job growth and substantial downward revisions to readings from May and June were the cause of consternation—so much so that the President took the unprecedented step of firing the Commissioner of the Bureau of Labor Statistics. Data revisions are not uncommon, but given the controversy about the revisions to U.S. data, it is interesting to note that Arkansas employment was also revised downward for June. What was originally reported as an increase of 1,200 is now reporting a decline of 600 jobs.
For July, the seasonally adjusted increase reflected growth across nearly every sector. Particularly large gains were reported for Construction, Professional & Business Services (primarily in Administrative & Support), Education and Health Services (all related to Health Care), and Leisure & Hospitality Services (Accommodation and Food Services).
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
The increase in Construction employment was notable for the fact that it followed a sharp decline reported in June. As shown in the figure below, Construction employment has been trending downward for a year or more, but the sharp drop in June (which was exacerbated by the June data revision) appears to have been largely transitory.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
Over the past 12 months, seasonally-adjusted nonfarm payroll employment in Arkansas has increased by 18,000 jobs—about 1.3%. Over the same period, U.S. payroll employment increased by 1.0%. Relative to the previous cyclical peak in February 2020, Arkansas employment has increased by 6.9%, while U.S. employment has increased by 4.8%/
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.
With annual data revisions now nearly complete, state-level data on employment and unemployment is now available with updates for January 2025.
The Arkansas unemployment rate was unchanged at 3.6% in January. The originally published data for December reported an unemployment rate for 3.4%, but recent revisions raised the December estimate to 3.6%. For more information on revisions to the LAUS data, see https://arkansaseconomist.com/laus-data-revisions/
The January figures indicated a fairly strong gain in household employment, +1,956. After the recent revisions, the data now show that household employment has not shown a month-to-month decline since April 2020. The number of unemployed edged slightly higher in January (+112). As a result, the labor force expanded by 2,068 for the month.
Payroll Employment Without seasonal adjustment, nonfarm payroll employment contracted by 16,500 jobs in January. However, there is always a sharp drop in employment after the holidays and the start of a new year. After taking this predictable seasonal pattern into account, the data for seasonally adjusted payroll employment showed an increase of 3,000 jobs for the month.
The largest gains came from Retail Trade and Professional & Business Services, which were both up by 1,700 jobs. Sectors showing declines included Construction and Manufacturing, as well as Wholesale Trade. Compared to a year earlier, nearly all sectors showed increases, with total employment increasing by 24,000 jobs—approximately 1.8%.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Revisions to Payroll Data The annual benchmark revisions changed some of the month-to-month patterns of employment growth for specific sectors, but had little quantitative impact on the situation at the end of 2024. As shown in the figure below, the data revisions had the effect of lowering measured employment during mid-2024, but higher growth estimates toward the end of the year brought the revised data back to nearly in line with previously-reported information. The largest revision was for the month of June (-10,600 jobs). By December the gap was reduced to 2,600 jobs. Hence, January’s increase of 3,000 jobs means that employment for January was higher than at any other time in history (at least for the seasonally-adjusted data).
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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.
The final, but unrevised, report for 2024 metropolitan area employment and unemployment came out this week.
Unemployment rates tended to edge higher from November to December. Mirroring the 0.1 percentage point increase recorded for the state, unemployment rates edged up in Hot Springs, Jonesboro, Little Rock and Pine Bluff. Compared to a year earlier, unemployment rates were unchanged or down slightly, with the exception of Memphis and Texarkana which ended the year with higher rates than in December 2023. Northwest Arkansas had the state’s lowest unemployment rate, which was down to 2.5% by December. Pine Bluff remained the metro area with the highest unemployment rate, unchanged at 4.9%.
Source: Bureau of Labor Statistics
Payroll Employment Nonfarm payroll employment rose sharply for Jonesboro in December, with mixed changes among other metro areas. The end-of-year surge in Jonesboro boosted year-over-year growth to 2.2%—the highest growth rate in the state for 2024. Northwest Arkansas and Central Arkansas both saw strong growth over the year as well. Memphis and Pine Bluff were the only metro areas to experience employment declines for the year.
Over the longer-run, Northwest Arkansas continues to lead the state in employment growth, followed by Central Arkansas and Jonesboro. Fort Smith and Hot Springs have shown positive growth over the last five years, while employment Memphis, Texarkana and Pine Bluff remain lower than pre-pandemic levels.
The next report on metro area employment and unemployment will incorporate annual revisions for nonfarm payroll employment and will partly include annual revisions to the unemployment data as well. We will report on the revisions when they are released in March and April.
Simultaneously with the release of second quarter Personal Income, the BEA also released new data for state GDP growth. As was the case with personal income, the comprehensive revisions to past data are more significant than the newly-reported second-quarter statistics.
The data for 2024:Q2 showed Arkansas GDP growing at an annual rate of 1.5%, compared to a 3.0% rate for the U.S. The news release from the BEA reported that GDP “increased in 49 states and the District of Columbia in the second quarter of 2024, with the percent change ranging from 5.9 percent at an annual rate in Idaho to –1.1 percent in Alaska.
The table below shows a breakdown of Arkansas and U.S. GDP growth by sector. Not surprisingly, the volatile agriculture component accounts for more than the difference between U.S. and Arkansas growth rates. Both nationally and here in Arkansas, growth in manufacturing as well as finance, real estate, professional services, and health services contributed notably to GDP growth.
Source: Bureau of Economic Analysis
Data Revisions The revisions to GDP over the past five years are of greater interest than the most recent quarterly growth rate. As shown in the figure below, the upward revisions to GDP growth—particularly for Arkansas—are far larger than the most recent quarterly uptick. The revised data for Arkansas show stronger growth in 2020 and 2021 than previously indicated, and the brief contraction in the first half of 2022 is now estimated to have been smaller. The cumulative result of the revisions was to raise Arkansas GDP by 2.7% as of the first quarter of 2024. The U.S. data were also revised higher, but only by 1.3% as of the first quarter.
Source: Bureau of Economic Analysis
The revisions included higher estimates for all goods-producing sectors in Arkansas, but were generally downward revisions for some of the fastest-growing service sectors (including Education, Health Care and Accommodation & Food Services).
Source: Bureau of Economic Analysis
The two sectors with the largest upward revisions were Agriculture, etc., and Durable Goods Manufacturing. The upward revision for Agriculture more than doubled the originally-published estimate. The most important change was that the previously-reported decline in the first half of 2023 was revised to be considerably smaller.
Source: Bureau of Economic Analysis
The other sector with a substantial revision was durable goods manufacturing. In this case, the revision shows much stronger growth in 2020-21, with the higher level of output being maintained in 2022 and 2023.
Source: Bureau of Economic Analysis
The net result of the new quarterly data, along with the revisions, is that Arkansas GDP in the second quarter was cumulatively 13.9% higher than it was in 2019:Q4. Cumulative growth for the U.S. over the same time period amounted to 10.7%.
