Though the pandemic has brought economic struggles to most communities, Hot Springs and Garland County are seeing increases in their revenue.
“The strength of sales tax collections, and the underlying sales they represent, has been one of the most surprising features of this pandemic-induced economic downturn,” Michael R. Pakko, the Arkansas Economic Development Institute’s chief economist and state economic forecaster, said. “It’s not just Garland County. Across the state, consumer spending has proven to be extremely resilient.”
In Garland County, 12 of 13 retail sectors were up in 2020 compared to 2019. These include sporting goods, hobby, book, and music stores, as well as clothing and clothing accessory stores and food and beverage stores. According to Pakko, cheap gas prices, reduced travel, and the $1,200 stimulus have given people more money to spend on goods.
“Ordinarily, economists would expect that temporary income windfalls, like the stimulus checks, would not translate one-for-one into consumer spending,” Pakko said. “Particularly in a recessionary environment, such temporary income gains tend to be saved or, equivalently, used to pay down accumulated debt.”
“In the current situation, in which it might be reasonable to expect the period of economic hardship to be short, tending to support continued consumer confidence, even in these crazy times.”
Read the full article on the Sentinel-Record’s website here.