Money issues

Just how confident are we about the economy heading into the new year? American consumers’ confidence in the U.S. economy grew in December as high inflation continued to ease, according to recent info from the Conference Board.

The Conference Board, described as a business think tank, said the latest consumer confidence index, released in late December registered 108.3 , a significant jump from the upwardly revised measure of 101.4 in November.

Economists were expecting the index to come in at 101. It’s the highest reading for the index since April 2022. So does that mean that last month we were even more confident in the economy than we thought we were?

We at least thought that Santa Claus was coming in December to chimneys and rooftops here in the good ol’ USA, regardless of how slick with snow and ice they may be, if our spending was any indication. American consumers were expected to spend overall more than $1 trillion on Christmas, with about $150 billion of that going to online retailers. Economists also expected us to party like it’s 1999, spending an average of $1,500 per household on food and drink.

That’s a lot of turkey & dressing and eggnog.

In Arkansas it’s likely we’ve spent less than the average, however. A report published by The Motley Fool indicates that in 2019 we spent an average of some $930 per household. In our region, incomes tend to be lower than in other regions of the country, but we tend to spend more per household on Christmas. We spent more than the region that includes Missouri, Iowa, and Nebraska. Maybe we’re just more generous in the South. Even if we think our northern neighbors are a bit stingy, we’d have the grace and good sense not to say so.

It may be that when all the accounting is done on how much we spent on Christmas 2022, Arkansans spent more than normal in 2022. The U.S. Department of Agriculture estimated net farm income nationally to increase nearly 14% and Arkansas generally had a good year despite sometimes uncooperative weather conditions. The agricultural sector, of course, is a major driver of Arkansas’ economy. However, input costs, especially for fuel and fertilizer, jumped significantly in 2022 and by many accounts, will remain high for the coming year if not longer.

In Jonesboro, the shopping, banking, medical services and industrial capital of Northeast Arkansas, it appears taxpayers have no qualms about the economy, as expressed by their willingness to spend, and as they spend, tax receipts increase.

The calculations on what Americans spent on Christmas, though, may not reflect the real cost. I remember well the TV ad campaign some years ago by a financial institution that urged consumers to start saving money early in order to afford the year-end costs incurred during the holidays. In that ad campaign, the savvy budgeter remarked to his debt-ridden buddy that he had no problem spreading Christmas cheer because he belonged to a Christmas club, saving money weekly or monthly in order not to be financially overwhelmed. Meanwhile, the sad sack in the commercial complained that he didn’t join a Christmas club at his bank or his employer, instead belonging to the January club – every January he got clubbed by Christmas bills.

One recent survey said in 2022 that many Americans used credit cards to finance their holiday spending. A third of those credit card users said they won’t be able to pay off the bill and will have to carry a balance into 2023.

As surely as Christmas comes every December, so in January comes the next session of the Arkansas General Assembly. The session that begins this week is called the “regular session,” because it was mandated by the Constitution to be convened regularly, every other January in odd-numbered years.

This one, regardless of how it turns out for the taxpayers, will certainly have a feeling of uniqueness to it.

For the first time, legislators will assemble with a female as the leader of state government. Sarah Huckabee Sanders, daughter of former Gov. Mike Huckabee and the press secretary to former President Donald Trump, is the first woman to be elected Arkansas governor. She is joined at the top of the executive branch by Leslie Rutledge as the incoming Lt. Governor. Rutledge served as the state’s attorney general prior to her election to the No. 2 post in state government.

Sanders, who has told us she will save Arkansans from the clutches of the radical left agenda advanced by President Joe Biden, wants to continue cuts to the state income tax begun by her predecessor, Gov. Asa Hutchinson, and has indicated she wants “more options” for parents whose children are enrolled in failing schools. I wonder if those options include vouchers (from taxpayers’ money) by which parents could pay private-school tuition.

It seems that some patrons of rural school districts may oppose a plan that would include vouchers, since in general, the money in Arkansas follows the student.

What if a small school fell below the enrollment threshold established for a school to prevent consolidation? Perhaps some small district patrons might contend that there is no larger or better-performing district within driving distance so their children won’t have the same opportunities to transfer as students in some other locations? Would there be Lakeview-like litigation? Will teachers get pay raises?

These are the post-Christmas packages legislators must unwrap.

Editor’s note: Paul Holmes is editor-at-large for Northeast Arkansas Talk Business & Politics. He can be reached at [email protected]. The opinions expressed are those of the author.