Economists Stress the Need for Policy Improvements

The United States has survived the Great Recession and is plodding along in its recovery, a group of economists agreed at the 19^th annual Business Forecast luncheon.

Now it’s time for federal lawmakers to help their citizens pick up the pace of that recovery.

“It’s time for them to get our house in order,” said Kathy Deck, director of the Center for Business and Economic Research, which presents the event. The CBER is part of the University of Arkansas’ Sam M. Walton College of Business.

Walton College dean Eli Jones welcomed a crowd of about 1,000 to the event, which was held at the John Q. Hammons Center in Rogers. J.B. Hunt Transport Services Inc. president and CEO John Roberts served as the moderator, and the panel of economists delivered similar messages, ones of cautious optimism.

“There’s a chance we don’t come out of that hole as quickly as we did in the past,” Christopher Wallace, research director and senior vice president at the Federal Reserve Bank of St. Louis, said while predicting a 2013 increase in gross domestic product of 2 percent to 3 percent.

Deck and Adolfo Laurenti, deputy chief economist and managing director at Mesirow Financial, agreed with Wallace’s sentiment. All three cited the lack of a sound strategy in dealing with the U.S. deficit as the biggest hindrance to a more dynamic recovery.

As far as state economics are concerned, Deck applauded gains in a couple of areas, but followed by highlighting the need for further improvements. One example is Arkansas recently achieving a benchmark — 25-plus percent — in terms of its inhabitants who hold at least a bachelor’s degree.

“The national average is 33 percent,” Deck said after pausing. “So, let’s go.”

Deck also reported 0.7 percent growth in statewide non-farm employment from December 2011 to December 2012, but added that number “is just not enough.”

Particularly troubling, Deck said, were drops during that same period in the professional and business services, information, financial activities and construction industries.

In Northwest Arkansas, however, Deck said employment growth — 4.3 percent from December 2011 to December 2012 — has reached pre-recession levels.

“Some of this is catch-up [from the recession] … but we’re still significantly outperforming the state and the nation,” she said.

Deck expects continued employment growth in the construction, leisure and hospitality, professional and business services, and retail sectors in 2013.

Again, though, she stressed the need for broader policy improvements on a federal level. Until then, she said, the recovery on all levels will be slow and steady.

“None of these things are going to change the U.S. economy on a dime,” Deck said.