Fort Smith area sees per capita income slip in 2009

Pine Bluff was the only Arkansas metro area to see a gain in 2009 per capita income according to federal Bureau of Economic Analysis report released Monday (Aug. 9).

Per capita incomes in the Fort Smith metro area during 2009 fell 2.1% to $30,053 compared to $30,714 in 2008. The 2009 income, however, was a gain over the $29,929 in 2007. The Northwest Arkansas area saw per capita income fall 2.9% to $31,562 in 2009 compared to $32,537 in 2008. The region’s 2007 per capita income was $32,363.

The Pine Bluff area was an exception to the rule, with increases seen in only 134 of the nation’s 366 metro areas. Many of the increases were related to federal stimulus funds, according to the BEA report.

“MSA per capita personal income growth rates in 2009 reflect the distribution of countercyclical income transfers (under the American Recovery and Reinvestment Act of 2009 and the Economic Stimulus Act of 2008). Since these transfers were received primarily by unemployed workers in 2009, their contribution to per capita personal income growth tended to vary with MSA unemployment rates,” the report noted. “For example, they contributed 1.9 percentage points to personal income growth in El Centro, Calif., in 2009 (the MSA with the highest unemployment rate in the nation) but only 0.2 percentage point to growth in Bismarck, N.D. (with the nation’s lowest unemployment rate).”

Jeff Collins, an economist based in Northwest Arkansas and economist for The Compass Report presented by Benefit Bank, said the stimulus effect provides a clear picture of the extent of economic difficulties.

“It (stimulus funding) was never intended to be an eternal process. It was supposed to be stopgap measure. That the economy was so reliant on the stimulus tells you how deep the recession was,” Collins explained.

Collins also said the slow economic recovery with little or no job creation may continue to crimp consumer spending — the heart of the U.S. economic engine.

“The kind of consumption that could lead to full-blown recovery is not going to happen. People have lost a lot of wealth, and as long as we have this much uncertainty in the market, people are going to sit on the sidelines with their money,” he said.

Consumers on the sidelines also could prove a political liability. Collins noted: “It’s very problematic from a political perspective. While I don’t think the economy will slip into a double dip recession … I think what you’ve got is a lot of reasons to be concerned about the expected, which is some form of recovery with a troubling unemployment rate.”

Overall, per capita personal income growth rates ranged from 12% in Jacksonville, N.C., to a drop of 8.4% in Midland, Texas. Personal income declined in 223 MSAs, increased in 134, and remained unchanged in 9 MSAs. On average, MSA personal income fell 1.8% in 2009, after rising 2.7% in 2008.

A dip in inflation may add some consolation to the overall decline. Inflation, as measured by the national price index for personal consumption expenditures, declined to 0.2% in 2009 from 3.3% in 2008.

Other details from the BEA report include:
• In most of the 57 MSAs where net earnings increased, the gains were concentrated in the government sector. Military earnings growth was particularly strong in seven of the 10 MSAs with the fastest personal income growth in 2009: Jacksonville and Fayetteville, N.C.; Manhattan, Kan.; Elizabethtown, Ky.; Lawton, Okla.; Clarksville, Tenn.; and Killeen, Texas.
• Only in five MSAs (Kennewick, Washington; Cumberland, Maryland; Morgantown, West Virginia; Cape Girardeau, Missouri; and Ithaca, New York;) did the private sector account for most of earnings growth in 2009.
• Among the 52 MSAs with a population of one million or more, only three had an increase in both net earnings and personal income in 2009 (Washington, D.C.; San Antonio, Texas; and Virginia Beach, Va). The biggest gains in compensation in these three MSAs were in the federal government (civilian and military combined). Private sector compensation declined in these three MSAs.
• On average, personal income declined 2.3 percent for these 52 large MSAs, with growth rates ranging from 1.2 percent in Virginia Beach to -5.0 percent in Las Vegas.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
2009: $31,562 (down 2.9% from 2008)
2008: $32,537
2007: $32,363
• 276 — 2009 per capita rank among all 366 U.S. metro areas

Fort Smith
2009: $30,053 (down 2.1% from 2008)
2008: $30,714
2007: $29,929
• 316 — 2009 per capita rank among all 366 U.S. metro areas

Hot Springs
2009: $32,705 (down 1.7% from 2008)
2008: $33,298
2007: $33,055
• 244 — 2009 per capita rank among all 366 U.S. metro areas

Jonesboro
2009: $29,378 (down 2.8% from 2008)
2008: $30,228
2007: $28,870
• 331 — 2009 per capita rank among all 366 U.S. metro areas

Little Rock-North Little Rock-Conway
2009: $38,750 (down 0.6% from 2008)
2008: $39,012
2007: $39,074
• 88 — 2009 per capita rank among all 366 U.S. metro areas

Memphis-West Memphis
2009: $37,495 (down 2.8% from 2008)
2008: $38,577
2007: $38,050
• 117 — 2009 per capita rank among all 366 U.S. metro areas

Pine Bluff
2009: $29,170 (up 1.6% from 2008)
2008: $28,698
2007: $27,519
• 336 — 2009 per capita rank among all 366 U.S. metro areas

Texarkana
2009: $31,900 (down 1.3% from 2008)
2008: $32,338
2007: $31,311
• 267 — 2009 per capita rank among all 366 U.S. metro areas