Metrics Show Arkansas' Slow, Fragile Economic Rebound

by Jan Cottingham  on Monday, Jul. 30, 2012 12:00 am  

A roundup of Arkansas economic indicators signals that the state generally is surpassing the U.S. rebound from the recession, but Arkansas' bounce-back is slow and fragile.

Michael Pakko, whose Arkansas Economist blog provided the charts accompanying this story, told Arkansas Business: "I've spent a lot of time as these things have developed trying to explain what was happening in late 2010 and particularly in early 2011 where both the U.S. and Arkansas economies were slowing down and Arkansas seemed to be slowing down more. But more recently I think that situation has reversed." Still, said Pakko, the state economic forecaster, it's "a painfully slow recovery."

Among the more accurate indicators, according to Pakko, is personal income. Personal incomes in the state edged up by 0.3 percent in first-quarter 2012 compared with fourth-quarter 2011, the U.S. Bureau of Economic Analysis reported. However, Pakko noted on his blog, that rate "was the slowest among all the positive growth rates in the nation ... ."

Year over year, Arkansas saw personal income rise by 2.4 percent. It's now about 6 percent higher "than the peak recorded at the beginning of the recession," wrote Pakko, who's with the Institute for Economic Advancement at the University of Arkansas at Little Rock.

Housing sales also provide significant insight into the state's and the nation's economies. Arkansas home sales during second-quarter 2012 showed a decline compared with the first quarter, using seasonally adjusted quarterly data.

Pakko had forecast that homes sales would rise 7.5 percent this year compared with 2011. "If sales are to reach that total [25,000], we'll have to see some improvement in the second half of the year," he said.

The unemployment rate in Arkansas slipped to 7.2 percent in June compared with 7.3 percent in May. The number of jobless Arkansans fell to 99,185, which Pakko noted "was the first time Arkansas unemployment has fallen below 100,000 since February 2009."

Studying nonfarm payrolls on a year-over-year basis, "the seasonally adjusted figures show a net increase of 6,900 jobs since 2011," he said.

Pakko predicted, however, that payroll employment data would eventually be revised to show stronger job growth in late 2011. "If we take these likely revisions into account, payroll employment from June 2011 through June 2012 has expanded by over 16,000 instead of the 6,900 implied by [the July 20] report."



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