Dr. Michael Pakko Chief Economist and State Economic Forecaster Institute for Economic Advancement, UALR The Arkansas Economic Outlook October 15, 2014 Disclaimer: 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.
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Dr. Michael PakkoChief Economist and State Economic ForecasterInstitute for Economic Advancement, UALR
The Arkansas Economic Outlook
October 15, 2014
Disclaimer: 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.
Arkansas’ Experience
Source: Federal Reserve Bank of Philadelphia
Arkansas’ Experience
Source: Federal Reserve Bank of Philadelphia
Arkansas’ Experience
• By some measures, Arkansas is faring better than the rest of the nation
E.g., Personal Income, Proprietors’ Income, Dividends & Interest, etc.
• By other measures, Arkansas is lagging behindE.g., Employment, Wages and Salaries, Labor Force Participation
• Common element: Weak Labor Market Conditions(even weaker than we thought)
Gross Domestic Product
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
Personal Income
Source: Bureau of Economic Analysis
Personal Income
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.
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.
52
54
56
58
60
62
64
2006 2007 2008 2009 2010 2011 2012 2013 2014
Percen
t
Employment/Population Ratios
U.S.
Arkansas
56
58
60
62
64
66
68
2006 2007 2008 2009 2010 2011 2012 2013 2014
Percen
t
Labor Force Participation Rates
U.S.
Arkansas
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.
Economic Forecasts"Prediction is very difficult, especially about the future."
‐ Niels Bohr , Nobel prize‐winning physicist.
Forecast Methodology
Model: Arkansas Baseline from Moody’s Analytics.Part of a structural econometric model of the U.S. EconomyLinked to US forecast, with relationships estimated by sectorBaseline forecast from Moody’s macroeconomic U.S. model
Alternative Forecast Paths: Moody’sWells FargoWall Street JournalBlue Chip ConsensusNABE
Employment
Q4/Q4 Growth
2012 ‐0.9K‐0.8%
2013 +7.2K+0.6%
2014 +12.5K+1.1%
2015 +24.6K+2.1%
2016 +24.2K+2.0%
Employment
Q4/Q4 Growth
2012 ‐0.9K‐0.8%
2013 ‐2.4K‐0.2%
2014 +11.1K+0.9%
2015 +24.3K+2.1%
2016 +24.0K+2.0%
Including expectedrevision in 2015
Employment
Q4/Q4 Growth
2012 ‐0.9K‐0.8%
2013 +7.2K+0.6%
2014 +12.5K+1.1%
2015 +24.6K+2.1%
2016 +24.2K+2.0%
Q4/Q4 Growth
2012 ‐0.9K‐0.8%
2013 ‐2.4K‐0.2%
2014 +11.1K+0.9%
2015 +24.3K+2.1%
2016 +24.0K+2.0%
As Published
Expected Revision
Unemployment
End of Year (Q4)
2013 7.5
2014 6.0
2015 5.5
2016 5.3
Real GDP
Real GDP
Q4/Q4 Growth (%)2013 4.12014 1.52015 2.1
2016 2.0
Personal Income
Q4/Q4 Growth (%)2013 -1.92014 4.12015 5.4
2016 5.7
Retail Sales
Q4/Q4 Growth (%)
2013 1.12014 0.62015 5.4
2016 5.6
Home Sales
Sales(Pct. Change)
2012 23.3K‐0.2%
2013 25.7K10.1%
2014 27.8K8.4%
2015 30.6K9.9%
2016 32.4K6.0%
Arkansas EconomistFor more information and analysis of the Arkansas Economy,
visit the Arkansas Economist: www.arkansaseconomist.com
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