The Bureau of Economic Analysis reported yesterday that Personal Consumption Expenditures (PCE) rose by 3.9% in Arkansas in 2016. Nationwide, the growth rate was 4.0%. PCE is not adjusted for inflation, so after accounting for a 1.2% increase in prices from 2015 to 2016, Arkansas real PCE increased by about 2.7%. As shown in the figure below, Arkansas PCE has been increasing at a slower pace than the national averages since 2012.

Source: Bureau of Economic Analysis
The fastest-growing components of PCE in Arkansas included Health care (+7.0%), Other nondurable goods (+6.8%), and Food services and accommodations (+5.6%). The only category of spending to decline from 2015 to 2016 was Gasoline and other energy goods, which was affected by declines in gasoline prices.

Source: Bureau of Economic Analysis
Per Capita PCE
One of the reasons for the slower growth in Arkansas PCE relative to the U.S. average is the relatively slow population growth rate in Arkansas. Population growth in Arkansas was approximately 0.3% in 2016, while the comparable growth rate for the U.S. population was 0.7%. Accordingly, on a per capita basis, Arkansas PCE increased by 3.5% in 2016, slightly exceeding the national average growth rate of 3.2%.
The table below displays spending levels and expenditure shares for per capita PCE in 2016. Overall, per capita spending in Arkansas was $31,117 — 78.5% of the national average. It is not surprising that spending per capita is relatively low in Arkansas: income per capita is below the national average and prices also tend to be well below the national average. Figures from the Regional Price Party data show that prices are approximately 12.6% lower in Arkansas than the national average, with housing costs particularly low — about 36% lower than the national norm. These price patterns show through to the per capita spending figures, with expenditures on housing nearly 34% lower than the U.S. average. For two categories of spending, per capita PCE in Arkansas exceeds the national rate: Motor vehicles and parts, and Gasoline and other energy goods. At the other extreme, spending on Transportation services amounts to less than one-half of the per capita level nationwide.