Post on 29-May-2020
Dr. Michael PakkoChief Economist and State Economic ForecasterInstitute for Economic Advancement, UALR
The Arkansas Economic Outlook
November 16, 2016
The views expressed are my own, and do not necessarily reflect the positions of the Federal Reserve Bank of St. Louis, the Federal Reserve System, the University of Arkansas at Little Rock, the University of Arkansas System, or the Institute for Economic Advancement.
Overview
• Review of Economic Conditions:• Output• Income• Spending• Employment/Unemployment
• Arkansas lagged the nation through much of the economic recovery – particularly in employment. Since 2014, employment growth has accelerated.
• Outlook: Slow, but steady economic growth.
Gross Domestic Product
Source: Bureau of Economic Analysis
Gross Domestic Product
Source: Bureau of Economic Analysis
Gross Domestic Product
Source: Bureau of Economic Analysis
Gross Domestic Product
Source: Bureau of Economic Analysis
Coincident Indexes
Source: Federal Reserve Bank of Philadelphia
Coincident Indexes
Source: Federal Reserve Bank of Philadelphia
Personal Income
Source: Bureau of Economic Analysis
Personal Income
Source: Bureau of Economic Analysis
Personal Income
Source: Bureau of Economic Analysis
Personal Income
Source: Bureau of Economic Analysis
U.S. Arkansas U.S. Arkansas
Personal Income 4.3 4.2 100.0 100.0
Wages & Salaries 4.3 3.6 50.7 40.7
Proprietors' Income 5.6 7.8 11.1 12.3
Dividends, Interest & Rent 5.8 6.8 23.6 29.6
Transfer Receipts 3.0 2.9 12.6 17.5
Personal Income Growth, 2010:Q1 - 2016:Q2
Annualized Growth RatesGrowth as Percent of
Personal Income Growth
Taxable Sales
Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement.
Taxable Sales
Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement.
Taxable Sales
Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement.
Taxable Sales
Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, U.S. Census Bureau, Institute for Economic Advancement.
Sources: Arkansas Realtors® Association, Institute for Economic Advancement.
Home Sales
Sources: Arkansas Realtors® Association, Institute for Economic Advancement.
Home Sales
Unemployment
Source: Bureau of Labor Statistics.
Unemployment
Source: Bureau of Labor Statistics.
Local Area Unemployment Statistics (LAUS) - Arkansas
1,200
1,220
1,240
1,260
1,280
1,300
1,320
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul
Thou
sand
s
Employment
2010 2011 2012 2013 2014 2015 2016
405060708090100110120
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul
Thou
sand
s
Unemployment
20112010 2012 2013 2014 2015 2016
1,290
1,300
1,310
1,320
1,330
1,340
1,350
1,360
1,370
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul
Thou
sand
s
Labor Force
2010 2011 2012 2013 2014 2015 2016
Unemployment
Source: Bureau of Labor Statistics.
Unemployment
Source: Bureau of Labor Statistics.
Unemployment
Source: Bureau of Labor Statistics.
Employment
Source: Bureau of Labor Statistics.
Employment
Source: Bureau of Labor Statistics.
Employment
Source: Bureau of Labor Statistics.
Employment
Source: Bureau of Labor Statistics.
Employment
Source: Bureau of Labor Statistics.
As Published
Expected Revision Change
Mining & Logging -2.6 -2.9 -0.3Construction 1.1 3.4 2.3Manufacturing -1.2 -0.1 1.1
Wholesale Trade 1.3 -0.1 -1.4Retail Trade 6.3 4.5 -1.8
Transportation & Utilities 0.7 0.3 -0.4Information Services 0.4 -0.6 -1.0
Financial Services 0.5 2.8 2.3Professional & Business Services 6.1 4.9 -1.2
Education & Health Services 11.5 8.7 -2.8Leisure & Hospitality Services 6.9 6.5 -0.4
Other Services 1.4 1.0 -0.4Government 0.5 -0.5 -1.0
TOTAL 32.9 28.0 -4.9Percent 2.7% 2.3% -0.4%
Arkansas Nonfarm Payroll Employment Employment changes (thousands of jobs), December 2014 - September 2016
Economic Forecasts“Prediction is difficult – particularly when it involves the future."
‐Mark Twain
Forecast Methodology
Model: Arkansas Baseline from Moody’s Analytics.
Part of a structural econometric model of the U.S. Economy
Linked to US forecast, with relationships estimated by sector
Baseline forecast from Moody’s macroeconomic U.S. model
Alternative Forecast Paths: Wells FargoWall Street JournalNABE
Augmentations: Judgmental adjustments and time-series estimation of national-state model linkages and assumptions (e.g. productivity trends).
Employment
Q4/Q4 Growth
2014 19.7K1.7%
2015 26.2K2.2%
2016 10.2K0.8%
2017 11.2K0.9%
2018 11.9K1.0%
Employment
Including expected revision in 2017
Q4/Q4 Growth
2014 19.7K1.7%
2015 19.7K1.6%
2016 11.8K1.0%
2017 11.1K0.9%
2018 11.8K1.0%
EmploymentArkansas Nonfarm Payroll Employment Growth Forecasts for 2016:Q4-2018:Q4
Employment changes Thousands of
Jobs Percent
Mining & Logging 0.3 4.9
Construction 2.1 4.1
Manufacturing -1.2 -0.8
Wholesale Trade 0.7 1.6
Retail Trade 3.4 2.4
Transportation & Utilities 0.4 0.7
Information Services 0.1 0.7
Financial Services 0.5 1.0
Professional & Business Services 6.7 4.7
Education & Health Services 4.5 2.5
Leisure & Hospitality Services 3.3 2.9
Other Services 0.4 0.8
Government 1.7 0.8
TOTAL 22.9 1.9
Real GDP
Real GDP
Q4/Q4 Growth (%)2015 0.82016 2.42017 2.9
2018 2.8
Personal Income
Q4/Q4 Growth (%)2015 1.52016 2.72017 3.0
2018 3.5
Retail Sales
Q4/Q4 Growth (%)2015 0.92016 1.42017 2.12018 2.8
Home Sales
Sales(Pct. Change)
2014 28.1K7.3%
2015 30.9K10.0%
2016 33.6K8.7%
2017 36.5K8.4%
2018 36.5K0.2%
Unemployment
End of Year (Q4)
2015 4.8
2016 4.1
2017 4.3
2018 4.4
Arkansas EconomistFor more information and analysis of the Arkansas Economy,
visit the Arkansas Economist: www.arkansaseconomist.com