The Arkansas Economic Outlook Dr. Michael Pakko Chief Economist and State Economic Forecaster Institute for Economic Advancement, UALR 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 Personal Income Growth, 2010:Q1-2016:Q2 Annualized Growth Rates Growth as Percent of Personal Income Growth 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 Source: Bureau of Economic Analysis
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.
Home Sales Sources: Arkansas Realtors Association, Institute for Economic Advancement.
Home Sales Sources: Arkansas Realtors Association, Institute for Economic Advancement.
Source: Bureau of Labor Statistics. Unemployment
Unemployment Local Area Unemployment Statistics (LAUS) - Arkansas Thousands 120 110 100 90 80 70 60 50 Unemployment 40 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 2010 2011 2012 2013 2014 2015 2016 1,320 Employment 1,300 1,280 Thousands 1,260 1,240 1,220 1,200 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 2010 2011 2012 2013 2014 2015 2016 1,370 Labor Force 1,360 1,350 Thousands 1,340 1,330 1,320 1,310 1,300 1,290 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 2010 2011 2012 2013 2014 2015 2016 Source: Bureau of Labor Statistics.
Source: Bureau of Labor Statistics. 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
Employment Arkansas Nonfarm Payroll Employment Employment changes (thousands of jobs), December 2014 - September 2016 As Published Source: Bureau of Labor Statistics. Expected Revision Change Mining & Logging -2.6-2.9-0.3 Construction 1.1 3.4 2.3 Manufacturing -1.2-0.1 1.1 Wholesale Trade 1.3-0.1-1.4 Retail Trade 6.3 4.5-1.8 Transportation & Utilities 0.7 0.3-0.4 Information Services 0.4-0.6-1.0 Financial Services 0.5 2.8 2.3 Professional & Business Services 6.1 4.9-1.2 Education & Health Services 11.5 8.7-2.8 Leisure & Hospitality Services 6.9 6.5-0.4 Other Services 1.4 1.0-0.4 Government 0.5-0.5-1.0 TOTAL 32.9 28.0-4.9 Percent 2.7% 2.3% -0.4%
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 Fargo Wall Street Journal NABE Augmentations: Judgmental adjustments and time-series estimation of nationalstate model linkages and assumptions (e.g. productivity trends).
Employment Q4/Q4 Growth 2014 2015 2016 2017 2018 19.7K 1.7% 26.2K 2.2% 10.2K 0.8% 11.2K 0.9% 11.9K 1.0%
Employment Q4/Q4 Growth 2014 2015 2016 2017 2018 19.7K 1.7% 19.7K 1.6% 11.8K 1.0% 11.1K 0.9% 11.8K 1.0% Including expected revision in 2017
Employment Arkansas 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 0.8 2016 2.4 2017 2.9 2018 2.8
Personal Income Q4/Q4 Growth (%) 2015 1.5 2016 2.7 2017 3.0 2018 3.5
Retail Sales Q4/Q4 Growth (%) 2015 0.9 2016 1.4 2017 2.1 2018 2.8
Home Sales Sales (Pct. Change) 2014 2015 2016 2017 2018 28.1K 7.3% 30.9K 10.0% 33.6K 8.7% 36.5K 8.4% 36.5K 0.2%
Unemployment End of Year (Q4) 2015 4.8 2016 4.1 2017 4.3 2018 4.4
Arkansas Economist For more information and analysis of the Arkansas Economy, visit the Arkansas Economist: www.arkansaseconomist.com