Yesterday the BEA released state-level data on Personal Consumption Expenditures (PCE) for 2018. PCE increased by 4.0% in Arkansas, well below the national average of 5.1%.* Growth rates ranged from a high of 7.3% in Washington to a low of 3.6% in West Virginia. Arkansas’ growth rate ranked 44th among the 50 states.
Source: Bureau of Economic Analysis
Arkansas PCE growth had been running at about the same pace as the U.S. in 2016 and 2017—and in fact, an upward revision to the Arkansas data for 2017 put Arkansas slightly ahead of the national average (4.5% vs. 4.4%). The 4.0% growth rate for 2018 represents slowdown from 2017, but was still well-above growth in any other year since 2011.
Source: Bureau of Economic Analysis
The slowdown between 2017 and 2018 was spread across most categories of consumer spending. The components that showed the sharpest slowdown included Recreational goods and vehicles, and Financial services and insurance. Spending categories that showed accelerated growth in 2018 included Clothing and footwear, and Gasoline and other energy goods.
Table 1 compares growth rates by spending categories for the U.S. and Arkansas. Nearly all components grew more slowly in Arkansas than the U.S., with the exception of Housing and utilities, and Final consumption spending of Nonprofit Institutions Serving Households. The largest contributors to overall growth—for both Arkansas and the U.S.—were Housing and utilities, and Health care.
Source: Bureau of Economic Analysis
Per Capita PCE
Arkansas PCE spending per person in 2018 averaged $34,095, approximately 79.7% of the U.S. average of $42,757. The difference is not surprising: Per capita personal income in Arkansas was 79.4% of the U.S. average in 2018.
Table 2 shows that per capita spending in Arkansas is lower than the national average for most expenditure categories, but exceeds the U.S. average for Motor vehicles and parts, and Gasoline and other energy goods. Conversely, per capita spending on Transportation services is significantly lower in Arkansas than the U.S. average. Across broad categories, Arkansans spend a larger share of their total budget on both durable and nondurable goods and less on Services. In the two categories of that represented the largest contributions to the growth of total consumer spending in 2018, Arkansans spend a smaller share of their budgets on Housing and utilities but a higher share on Health care.
Source: Bureau of Economic Analysis
*Note: PCE growth rates are not adjusted for inflation.
