Dr. Michael Pakko with UALR's Institute for Economic Advancement says economic conditions in Arkansas are improving, but not at a fast enough pace to generate enthusiasm.
Appearing on Sunday night's Talk Business TV program on Fox 16, Pakko commented on housing, employment and consumer spending data and how the post-recession blues remain difficult to shake.
“We've got growth rates that show we're still in a recovery mode, but not fast enough to generate enough jobs to bring down the unemployment rate substantially and get people excited about spending again,” Pakko said.
Arkansas unemployment has fallen nearly a full percentage point from a year ago. The June 2012 jobless rate was 7.2% compared to 8.1% in June 2011. Also, Pakko noted that consumer spending has jumped roughly 6% in year-over-year comparisons, although inflation accounts for some percentage of the increase.
Still, he says “significant progress” has been made much greater than his October 2011 forecast predicted.
mes we don't take a step back and look at the big picture as often as we should,” said Pakko in describing why the recovery has a hangover feeling to it. “Things are moving in a positive direction. I think what makes people feel like things are still sluggish is that it's a slow expansion.”
Housing is “moving in the right direction,” but Pakko warned that the second half of the year will be critical for the industry. He said several factors account for less-than-stellar sales growth, such as a lack of consumer confidence, households with damaged credit, tighter lending standards and some problematic inventory.
While the recovery will continue with generally positive data, Pakko said he doesn't expect a major jump-start to happen anytime soon.
“I'm cautiously optimistic. I'm not expecting any major changes in the trends,” he said.
You can watch Pakko's full interview below.