A forum for information and analysis on the Arkansas economy

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%.

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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-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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Arkansas Employment and Unemployment – June 2021

Labor market indicators suggest that the Arkansas economy was treading water in June.  The unemployment rate was unchanged, standing at 4.4% for the fourth month in a row and payroll employment was essentially unchanged.  Arkansas’ 4.4% unemployment rate is less than one percentage point higher than pre-COVID rates, and was 1.5 percentage points lower than the nationwide unemployment rate of 5.9% in June.

Source: Bureau of Labor Statistics

Not only was the unemployment rate unchanged in June, but the underlying components were essentially flat as well.  The number of unemployed was up for the first time since the pandemic struck labor markets in April 2020, but the increase was only 500.  By comparison, the number of unemployed had declined by 7,800 over the first five months of the year.  The household survey showed that the number of employed was down, but only by 750.  As a result, the labor force contracted by 250.  None of these changes are economically or statistically significant.

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

Payroll Employment
Nonfarm payroll employment was essentially unchanged in June as well, with a small net increase of 400 jobs (seasonally adjusted).  Not-seasonally adjusted data showed a slight decline in total employment (-3,700 jobs) but the declines were entirely attributable to the end-of-school-year effects, reflected in lower employment in Educational Services and in State and Local government.  These declines were partly offset by seasonal employment gains in Leisure and Hospitality Services.  After seasonal adjustment to account for these typical recurring patterns, employment in (private) Educational Services was up slightly, while State and Local Government employment was down somewhat.  Hiring in Leisure and Hospitality sectors was up slightly after seasonal adjustment (indicating a larger-than-typical June expansion)

As shown in the table below, Nondurables Manufacturing resumed its recent downward trend in June after showing a sight increase a month earlier.  Employment in Construction and Retail Trade was also down for the month.  Nearly all service-providing sectors showed employment gains, particularly Professional & Business Services.

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

Nearly all sectors have shown substantial growth since June 2020—with the notable exceptions of Nondurables Manufacturing and Government employment.  Compared to pre-pandemic levels, employment remains down by more than 27 thousand.  A handful of sectors have recovered enough to show net gains since February 2020, including Construction, Durables Manufacturing, Retail Trade and Financial Services.

In percentage terms, Arkansas payroll employment was 2.1% lower than in February 2020.  Nationwide, employment remains 4.4% lower than before the pandemic.

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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Arkansas GDP – 2021:Q1

The U.S. Bureau of Economic Analysis recently published state-level estimates of Gross Domestic Product for the first quarter of 2021.  The report showed widespread recovery from the COVID-19-induced recession of 2020, with all 50 states showing sizable quarterly growth.  Annualized rates ranged from 4.5% in Texas to 10.9% in Nevada.  Arkansas’ growth rate for the quarter was 6.9%, slightly higher than the nationwide average of 6.4%.

A breakdown of quarterly growth rates by sector shows that Arkansas outpaced the national average in most industries.  For some sectors, including Retail trade and Transportation & Warehousing, Arkansas’ growth rate was slower in the first quarter, but had already displayed above-average recovery in the second half of 2020.  The largest contributor to growth was in Durable Goods Manufacturing, which contributed nearly 2 percentage points to the state’s growth rate.  The report from the BEA noted that “This industry was the leading contributor to the increases in 24 states.”  Arkansas trends were also consistent with nationwide patterns showing rapid growth in Information Services, as well as in  Professional, Scientific, and Technical Services.  Arkansas, along with 35 other states, also followed the national trend of seeing negative growth in Nondurable Goods Manufacturing.

Source: Bureau of Economic Analysis

The second two columns of the table show cumulative GDP growth since the fourth quarter of 2019 (which has been officially designated as the quarterly business cycle peak).  Arkansas is one of only fifteen states that are producing more now than before the pandemic (see also the figure below).  In other words, Arkansas and 14 other states have apparently completed the recovery phase of the economic expansion. In some sectors, growth has been substantial: for example, Finance and Insurance has grown at an average rate of 9.0% over the most recent 5 quarters covered.  Several sectors continue to show the lingering effects of the economic contraction at both the state and national levels: production remains lower than pre-pandemic levels in Transportation & Warehousing, Education, Health Care, and Nondurable Goods Manufacturing.

Source: Bureau of Economic Analysis

Data on GDP, particularly at the state level, is often subject to substantial revision.  The BEA will report revised historical statistics when the second-quarter data are released on October 1.

 

 

 

 

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Metro Area Employment and Unemployment – May 2021

Statewide employment trends have shown a slow pace of recovery over the past three months, and the data for the state’s metropolitan areas generally reflect that

Unemployment rates were unchanged in five of the state’s metro areas, but declined slightly in Fort Smith, Jonesboro and Little Rock. The 0.2 percentage point decline in Fort Smith came on top of a 0.1 percentage point downward revision to April’s unemployment rate. On the other hand, Jonesboro, Little Rock, and Pine Bluff all saw upward revisions of 0.1 percentage points for April.

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

Compared to a year ago, unemployment rates have fallen significantly in all of Arkansas’ metro areas. Of course, that’s not surprising. The News Release from the Bureau of Labor Statistics reported “Unemployment rates were lower in May than a year earlier in all 389 metropolitan areas” across the United States. The relative magnitudes of the changes largely reflect the initial impacts of COVID-19 driving unemployment rates higher a year ago. For example, Hot Springs experienced the largest spike in unemployment last spring and has shown the largest decline since then. Unemployment rates remain one to two percentage points higher than in the pre-pandemic month of February 2020. The fact that the statewide rate has fallen to within 0.6 percentage points of it’s February 2020 rate suggests that the non-metropolitan areas of the state have recovered more fully.

Such a pattern is borne out in a breakdown of unemployment rate changes by county. Because the data for counties are not seasonally adjusted, the map below measures changes from May 2019 to May 2021. In a handful of counties, unemployment rates are lower in May 2021 than they were two years earlier. Unemployment rates in metropolitan areas remain elevated, along with several counties in the Delta region. The aggregate for all metropolitan counties in May was 4.2% up 1.3 percentage points from two years earlier. For nonmetropolitan counties, the May unemployment rate—while somewhat higher at 4.9%—was only 0.8 percentage points higher than in May of 2019.

Payroll Employment
Nonfarm payroll employment was up 0.3% statewide in May (seasonally adjusted), but metro area estimates varied considerably. Employment in Jonesboro and Texarkana surged by 1.7% and 1.3%, respectively; and payrolls also expanded in Fayetteville, Hot Springs and Memphis. Employment declined for the month in Little Rock and Pine Bluff, and was unchanged in Fort Smith. Compared to February 2020, employment is down across all metro areas, with the net declines ranging from -0.5% in Northwest Arkansas to -4.0% in Central Arkansas.

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

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Little Rock Regional Economic Briefing – Nov. 17th, 2021

LOGOS

Please join the Little Rock Branch of the Federal Reserve Bank of St. Louis and the Arkansas Economic Development Institute on Thursday, November 17th, for a regional economic briefing for business leaders, educators, community development practitioners and others interested in the economy.

During this virtual presentation, you will hear an update on economic conditions and the outlook for the region and nation.

There is no charge to attend, but registration is required by Nov. 15.

Date: Thurs., Nov. 17, 2021
Time: 8 – 10 a.m.
Location: Virtual

 

Click Here for More Information

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