Leading national and state economists are predicting a continued economic rebound during the holidays with momentum continuing through 2022, according to reports delivered Wednesday.
Rising prices, however, also will continue and consumers will lose buying power even though wages are increasing. Economists examining the U.S. economy both said inflation will remain well above 2% and will likely lead to lower consumer spending.
Next year, Arkansas should see personal income rise about 5% though consumer spending will decline from robust levels during the pandemic and unemployment likely will remain below 4%, Michael Pakko, chief economist with the Arkansas Economic Development Institute, said Wednesday during an online forum highlighting the state and national economies.
Right now, consumer demand is robust and some businesses are using that as an opportunity to raise prices, said Kevin Kliesen, a business economist with the Federal reserve Bank of St. Louis. “These firms aren’t raising prices to protect their profit margins, they’re raising prices because they can,” he added. “This is kind of a change in psychology … that we really haven’t seen for two or three decades.”
Labor markets are challenging for employers while opening more opportunities for workers, Kliesen said, noting there are nearly 10.5 million job openings across the country and employers are easing standards such as drug testing and background checks to lure workers.
See the full article from Northwest Arkansas Democrat Gazette here.