Consumer spending is predicted to slow in Arkansas next year, according to a state economist. | Firelknot / Flickr
Consumer spending is predicted to slow in Arkansas next year, according to a state economist. | Firelknot / Flickr
While the Arkansas economy is still recovering from the pandemic recession, the state might well expect its economic pace to slow heading into next year, according to Arkansas Economic Development Institute economist and chief state economy forecaster Dr. Michael Pakko.
Earlier this month, economist Dr. Michael Pakko talked about economic issues with the American Council of Engineering Companies of Arkansas. Of note, Pakko said that the recession caused by the pandemic really only lasted from February to April 2020. The time since then has marked a long, continuing recovery.
"There's really no way that we can continue to have retail sales running as far above the growth rate of personal income as it has been during 2021," Pakko said in the speech Nov. 10. "And so I'm anticipating that in 2022, we'll see a slowdown in consumer spending, more here in Arkansas than the rest of the country because we've already basically spent it all, and we'll get back to a more sustainable growth path by the end of 2022 and into 2023."
He said also that Arkansas has been better off than most other states, mostly due to the lack of severe restrictions implemented in the state during the pandemic, according to Talk Business and Politics. Pakko also said that he expects Arkansas unemployment numbers to return to pre-pandemic levels by the end of the year.
As of October 2021, the state's unemployment rate had dropped to 4%.
Still, Arkansas faces challenges ahead. Small businesses, for example, have been feeling inflationary pressures on items from gloves to chicken. That will likely result in higher prices. If wages don't go up, too, purchasing power will diminish, factoring in to his predicted retail sales slowdown next year.
Another thing that could put a pinch on buying is the recently passed trillion-dollar national infrastructure bill. Natural State News previously reported on Congressman French Hill's thoughts on that.
“Of course, I do not believe we need to spend $5.5 trillion on the Green New Deal and new social spending priorities of the Democrats, on top of the $4.5 trillion that we spend every year,” Hill told Fox Business on Oct. 19. “But when you look at what’s in the bill, it’s concerning."
Critics also have said the spending bill could lead to higher taxes and contribute to already high inflation.
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