New data from the Federal Housing Finance Agency (FHFA) show that house prices in Arkansas continued to decline in the second quarter of 2011. The FHFA All-Transaction Index for Arkansas declined slightly (-0.2%) from the first quarter, leaving the index down 2.5% from the second quarter of 2010. The rate of decline in Arkansas home prices remains below the national average: the national statistics show prices down 1.9% in the second quarter and 4.5% lower than a year earlier.
Home price declines are far from uniform across the state. As shown in the chart below, prices in the Fayetteville metro area have followed a pattern similar to the national average, while prices in Little Rock have only recently shown modest declines.
Source: Federal Housing Finance Agency
In fact, house prices in some of the state’s smaller metro areas have fared even better than in the Little Rock area. In the second quarter of 2011, prices rose in Hot Springs, Pine Bluff and Texarkana. In each of these metro areas, prices are higher than they were a year earlier. In Texarkana, house prices are higher than they were in the last quarter of the recession (2009Q2), although prices in each of the other metro areas have fallen since then. If we consider changes over the past five years, home prices in the Fayetteville and Memphis areas are down sharply, but homes in the state’s other metro areas have maintained their longer-run values.
Yesterday’s personal income report for metropolitan areas did not include the usual calculations for per capita income. Although population figures from the 2010 Census are available for metropolitan statistical areas, the statistics for 2009 have not yet been reconciled with the new Census data (the available 2009 numbers are extrapolated from the 2000 Census).
Although we cannot yet make comparisons over time, it is possible to calculate levels of per capita income using the 2010 data. The calculations are shown in the table below:
Sources: Census Bureau, Bureau of Economic Analysis
The highest per capita income levels are in the Little Rock MSA (1.9% below the national average) and the lowest are in Pine Bluff (23.3% below the national average). Note that the national per capita income level used in the table ($39,901) is for all of the United States, not just the metropolitan portion of the country. Per capita income for the metro areas of the U.S. is somewhat higher: $42,254.
Updated Aug 10, 2001 @ 4:16 PM — Corrected figures for U.S. per capita income.
This morning, the Bureau of Economic Analysis (BEA) released statistics on 2010 personal income for the nation’s metropolitan areas. The BEA reported that “Personal income rose in 2010 in all but four of the nation’s 366 metropolitan statistical areas (MSAs).” This represents a vast improvement over 2009, when revised figures show that personal income increased in only 131 of the 366 metro areas. As shown in the map below, many of the fastest-growing MSAs were scattered across the southern U.S. The top quintile includes the Arkansas MSAs of Fayetteville-Rogers-Springdale and Jonesboro. Three other MSAs–Fort Smith, Pine Bluff, and Texarkana were in the next highest quintile.
As shown in the table below, personal income growth exceeded the national average for metro areas in all but two of Arkansas’ MSAs. In Hot Springs, a growth rate of 2.8% nearly matched the national growth rate of 2.9%, while growth in the Little Rock-N. Little Rock-Conway MSA was only 1.4%. The national rankings diplay in interesting pattern: the slower-growing MSAs in Arkansas for 2010 were among the best performers in the recession year of 2009. When taken as a two year average, growth rates for all of Arkansas’ MSAs — except Memphis — were at or above the median for the U.S.
Source: Bureau of Economic Analysis
The 2009 growth rates reported in the table have been revised since their initial release last year. The growth rate for Fort Smith (-1.5%) is unchanged from the preliminary figures, but all other growth rates were revised upward. In fact, the preliminary figures had shown negative growth rates for Hot Springs, Jonesboro and Texarkana, while the revised statistics show positive growth.
The breakdown of personal income sources shown in the table indicates that net earnings growth was positive in all MSAs except for Little Rock. (Net earnings includes wage and salary disbursements, supplements to wages and salaries, and proprietors’ income.) Transfer receipts provided substantial support for personal income in all of Arkansas metro areas, especially the smaller MSAs.
— Updated Aug 10, 12:35 PM to include data for Memphis.
The latest data on employment and unemployment for Arkansas’ metro areas indicates that unemployment rates have been increasing across the state. This morning’s news release from the Bureau of Labor Statistics reported that “unemployment rates were lower in June than a year earlier in 224 of the 372 metropolitan areas…” Unfortunately, none of Arkansas’ metro areas were included in that total. In fact, unemployment rates in Arkansas have increased across the board during the second quarter of 2011.
On a month-to-month basis, some of the June unemployment rates reported today jumped substantially higher than May. However, higher unemployment in June is a recurring seasonal phenomenon. After adjusting for seasonality, the increases in unemployment rates were more modest — but they were increases, nonetheless. The June jump in unemployment was largest in Fort Smith (+0.5 percentage points), but was also substantial in Fayetteville, Hot Springs, and Pine Bluff (+0.3 percentage points each). Unemployment in the Little Rock MSA was essentially unchanged.
Source: Bureau of Labor Statistics
When the statewide data was released, we noted that June’s payroll survey indicated somewhat greater strength in labor markets than did the household survey. The same is true of the metro area data. Nonfarm payroll employment declined in four of the state’s MSAs, but increased in three. Hot Springs showed a particularly large drop in payroll employment in June. However, this only partly offset substantial increases registered in April and May. Compared to a year ago, employment in both Hot Springs and Texarkana are up more than one percent.
Source: Bureau of Labor Statistics
Relative to the statewide trough in employment registered in February 2010, all but one of Arkansas’ MSAs have shown positive growth. Employment in Pine Bluff remains 2.2% below the level of February 2010, but is slightly above a low-point registered in February 2011. Compared to the start of the recession, employment changes range from down 6.3% in Fort Smith to essentially unchanged in Jonesboro.
The Bureau of Labor Statistics announced this morning that unemployment rates were “lower in May than a year earlier in 274 of the 372 metropolitan areas, higher in 85, and unchanged in 13.” Among Arkansas Metropolitan Statistical Areas (MSAs), unemployment rates were lower for only 2, with rates higher in the remainder (relative to a year earlier). Comparing May to the previous month, seasonally adjusted data show that the unemployment rate increased in 3 MSAs, declined in 3, and was unchanged in Hot Springs.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
The latest house price data from the Federal Housing Finance Agency (FHFA) shows that average house prices in Arkansas continued to decline in the first quarter of 2011. The FHFA “All Transactions Indexes,” which incorporate house price information from both home sales and refinancings, showed an average decline for Arkansas of 1.6% in the first quarter of the year. Over the last four quarters, the average value has fallen about 1.9%. These decreases are smaller than the national average: In the first quarter, average prices for the U.S. as a whole fell 2.7%, and are down 3.1% over the past four quarters.
Source: Federal Housing Finance Agency
The statewide average conceals some stark differences among regions of the state. As shown in the figure below, house prices in the Fayetteville-Springdale-Rogers metro area have followed a pattern very close to the U.S. average. Over the past four quarters, prices in Fayetteville are down 4%, and have fallen by 14% over the past five years. In contrast, house prices in central Arkansas are down only 1.1% compared to a year earlier, and are about 4% higher than five years ago.
Source: Federal Housing Finance Agency
The state’s smaller metro areas have generally fared better than the statewide average as well. In the first quarter, prices increased in Texarkana and Jonesboro. Both of these metro areas have generally seen modest but steady price increases throughout the “boom and bust” cycle experienced in most parts of the country. House prices in Hot Springs and Pine Bluff had been rising steadily during the early stages of the housing downturn, but have turned sharply negative in recent quarters. Prices in Fort Smith have also fallen over the past two years, but not as dramatically as in Hot Springs and Pine Bluff.
Source: Federal Housing Finance Agency
A longer-term perspective reveals the stark differences among Arkansas metro areas. House prices in five of the state’s metro areas are higher than they were at the beginning of 2006. Recent declines in Pine Bluff have lowered prices to about the same level as in 2006, while prices in northwest Arkansas are down by 14%–more than the national average decline of 11.8%.
It should be noted that even the relatively large price declines in the Fayetteville-Springdale-Rogers metro area pale in comparison to some of the more severly impacted regions of the country. Over the five year period from 2006:Q1 to 2011:Q1, house prices in California are down by nearly 35%, price declines in Florida and Arizona are close to 40%, and house prices in Nevada have fallen by nearly half: -48.9%.
The latest unemployment rate figures for Arkansas metro areas provide another example of the importance of considering seasonal patterns when analyzing month-to-month data. The raw, not-seasonally adjusted data released yesterday by the Bureau of Labor Statistics show unemployment rates declining between February and March for each of Arkansas’ metropolitan statistical areas (MSAs). However, it is typical for March that unemployment rates decline: Economic activity generally begins a seasonal resurgence in the spring, so unemployment rates tend to decline. If we seek to look beyond routine seasonal changes in the data to discern longer term trends and changes associated with the business cycle, it is helpful to consider seasonally adjusted figures.
As shown in the table below, the not-seasonally adjusted unemployment rate for Arkansas fell from 8.7% in January to 8.4% in Feburary, then to 8.0% in March. Yet, the seasonally adjusted figures show that the unemployment rate was steady at 7.8% for those three months. The decline from January to March was entirely seasonal in character, indicating nothing to suggest that the economic recovery was resulting in lower unemployment. Similarly, the not-seasonally adjusted data for Arkansas’ MSAs show declining unemployment rates across the board. But to what extent were those changes purely seasonal?
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
The seasonally adjusted data show that a portion of the lower unemployment in February represented a true decline. The data show that unemployment rates declined in five MSAs, remaining unchanged or rising in the other two. In March, however, seasonal factors were more important. The not seasonally adjusted data show lower unemployment rates for all seven MSAs while the seasonally adjusted figures show higher unemployment in all seven. So, why did unadjusted unemployment rates decline in March? Because it was March.
Beyond the month-to-month uncertainty associated with seasonal factors, metro area data are also more variable than the state-level or national data. Hence, it is even more important to view MSA data from a longer term perspective. With this consideration in mind, the figure below shows quarterly average unemployment rates for Arkansas MSAs. Rates declined slightly in the spring of 2010, but then rose during the second half of the year (partly as a result of temporary Census workers being idled). In nearly all of Arkansas’ MSAs, unemployment appears to have peaked in the fourth quarter of 2010 and declined in the first quarter of this year. By way of comparison, the seasonally-adjusted unemployment rate for the state as a whole was 7.9% in 2010:Q4 and 7.8% in 2011:Q1.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
The latest report on metro area employment and unemployment shows that job growth is picking up across most of the state, but Fort Smith and Pine Bluff appear to be lagging behind. This morning’s release from the Bureau of Labor Statistics includes new and revised data that show an improved outlook for central and northwest Arkansas in particular.
From December 2010 to January 2011, payroll employment declined by 0.5% in Fort Smith and by 1.1% in Pine Bluff. These two metro areas also showed year-over-year declines, and remain at employment levels far below those at the start of the national recession (in December 2007). The state’s other metro areas have shown varying degrees of progress toward recovering from job losses experienced during the recession. Jonesboro continues to lead with employment 0.4% higher than in December 2007.
Source: Bureau of Labor Statistics
These new employment figures include the annual “benchmark revisions,” in which past data are updated to incorporate information from more detailed sources. The revised data show that employment growth during 2010 was stronger than we realized at the time — particularly in the state’s two largest metro areas. In previously-reported data, both the Fayetteville-Springdale-Rogers MSA and Little Rock-North Little Rock-Conway MSA showed net job losses during 2010. The revised data show robust growth rates of over 3% in both metro areas. The revised data shows that much of this job growth ocurred in the first half of 2010, with slower gains during the second half.
Source: Bureau of Labor Statistics
The higher employment growth in Little Rock and Fayetteville are consistent with the pattern of unemployment rates across the state. Fayetteville has the lowest unemployment rate in the state — 6.2% in January (seasonally adjusted). The unemployment rate in Little Rock has fallen below 7% to approximately 6.8% in January. Pine Bluff continues to show the highest rate of unemployment, at 9.5%. Unemployment in the state’s other metro areas range from 7.2% in Texarkana to 8.2% in Fort Smith. The most recent data show that unemployment rates declined in all of the states MSAs in January, with rates down substantially since late summer and early autumn.
Sources: Bureau of Labor Statistics, Institute for Economic Advancement
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*Seasonally adjusted data for MSA Payroll Employment are available from the Bureau of Labor Statistics. However, data for unemployment rates are not. In order to facilitate comparisons over different months of the year, unemployment rates are seasonally adjusted by the Institute for Economic Advancement using the conventional Census-X12 ARIMA procedure.
Recently released data from the Federal Housing Finance Agency (FHFA) shows that house prices in the U.S. continued to decline during 2010, with average house prices down 1.3 percent nationwide. Here in Arkansas, the decline was somewhat larger — down 2.2 percent.
As shown in the table below, the average price decline for Arkansas is skewed by price changes in the northwest part of the state. House prices in the Fayetteville-Springdale-Rogers metro area were down 4.1 percent and in Fort Smith prices were down 3.6%. In the state’s other metro areas, price declines were smaller than the national average. In Texarkana, house prices were up slightly.
Source: Federal Housing Finance Agency
This is the third year of statewide house price declines. The FHFA housing price index for Arkansas peaked in the first quarter of 2008. However, the pattern of price changes has differed from one metro area to another. From 2000 until the peak, house prices in the Fayetteville area had risen by 51 percent. Over the past 5 years, however, prices in that region are down nearly 10%. Prices in Hot Springs continued to rise well after the peak was reached in other markets, but have fallen sharply in the past two years. In the state’s other metro areas price gains in the first part of the decade were more modest — and recent price declines have been commensurately smaller. Over the past five years, cumulative price changes have been positive in all the state’s metro areas except Fayetteville.
It takes some time to compile comprehensive GDP statistics for the nation’s 366 Metropolitan Statistical Areas (MSAs). This morning, the Bureau of Economic Analysis released figures for 2009. Although the numbers are not necessarily representative of more current economic conditions, they provide information about how Arkansas fared during the recession. In that sense, they also give some indication of how the state’s MSAs were positioned to share in the nationwide economic recovery that began in the latter half of 2009 and into 2010.
As discussed in a previous post, Arkansas’ economy was one of only 10 states that showed positive GDP growth in 2009. As shown in the Table below, GDP contracted in six of the seven MSAs that have a central city in Arkansas. Only the Little Rock-North Little Rock-Conway MSA showed positive growth in 2009 (+2.4%). This suggests that much of the growth revealed in the state-level GDP report for Arkansas was concentrated in the central part of the state.
Source: Bureau of Economic Analysis
Although the state’s other six MSAs showed negative growth for the year, each compared favorably to nationwide averages. The BEA reported that real GDP declined in 292 of the nations 366 MSAs (80%). On average, the metropolitan areas of the nation contracted by 2.4%. Jonesboro, the Arkansas MSA that showed the largest decline, contracted at a slightly greater pace. Jonesboro was also the only Arkansas MSA that fell below the median growth rate. But even the disappointing performance of GDP growth in Jonesboro is tempered by the observation that its economy had expanded by more than 4% in the previous year (an upward revision from previously-released data). As shown in the map below, the relatively favorable performance of GDP growth in Arkansas’ MSAs fits within a nationwide pattern. MSAs that experienced above-average growth tended to be concentrated in the region west of the Mississippi River and east of the Rocky Mountains.
In the state-level GDP report, Arkansas growth was concentrated in some key sectors: Mining, Information Services and Management Services. The breakdown of sectoral contributions to GDP growth in Arkansas’ metro areas show similar patterns. For example, Natural Resources and Mining contributed 0.4 percentage points to growth in the Little Rock metro area. (This is undoubtedly related to natural gas extraction activities in the northern part of the MSA.) Specialized service sectors contributed positively to growth across the state. For example, Financial Activities expanded in Fayetteville, Jonesboro, Little Rock, Pine Bluff and Texarkana. Professional and Business services provided positive growth in Hot Springs and Jonesboro. Education and health services expanded in most of the state’s MSAs.
It will be another year before we see statistics for MSA GDP in 2010. However, the patterns revealed in the 2009 data (along with other, more recent indicators) suggest that a positive economic growth is likely to have emerged for most regions of the state.
