Pakko: Revised Economic Forecast Calls for More Slow, Steady Growth

by Mark Carter  on Thursday, Mar. 29, 2012 1:01 pm  

Michael Pakko

Steady but slow growth remains the big picture forecast for the state's economy through 2013, according to state economic forecaster Michael Pakko.

Pakko heads the Institute for Economic Advancement at the University of Arkansas at Little Rock, and his updated economic outlook for the state was released Thursday. In it, Pakko said the storyline hasn't changed much.

"The pace of economic recovery in Arkansas slowed in 2011, even compared to the national rate, but it picked up strong at the end of the year with positive momentum entering 2012," Pakko told ArkansasBusiness.com. "Hopefully, it will carry on in 2012 and beyond."

Pakko's revisions entailed positive changes in the unemployment sector. The state jobless rate was lower than expected at the end of 2011 - down to 7.9 percent from a forecast of 8.2. Based on that revision, Pakko sees further reductions, forecasting rates of 7.4 percent for the fourth quarter of 2012, down from 7.9, and 7.0 for the fourth quarter of 2013, down from 7.6.

Home Sales, Income

Home sales were down in 2011 compared to the previous year, about 2.5 percent. Based on that data, Pakko still sees growth, but not the double-digit growth for 2012 he originally forecast.

Pakko's revised forecast for home sales calls for growth of 7.5 percent for 2012 with further 4.3 percent growth in 2013, still below what was originally forecast last year.

Personal income is expected to remain static, with a revised 2012 forecast of 5.0 percent, down from 5.1. The 2013 personal income forecast is unchanged at 3.9. The state's per capita personal income rose 3.7 percent in 2011.

Payroll employment data was revised to show a loss of 0.4 percent, down from 0.2. Based on that revision, Pakko still sees 1.3 percent growth for 2012 and 1.5 percent for 2013.

Pakko's revised forecast was presented at Thursday's Arkansas State University Economic Forecast in Jonesboro.

"In some cases, our expectations for improvement in the waning months of 2011 were exceeded, in other cases our outlook was overly optimistic," Pakko told conference attendees. "Accordingly, the forecast revisions are mixed. And the outlook - in broad strokes - continues to be one of steady but unremarkable growth."

More

See the full report at Pakko's blog, Arkansas Economist.

 

 

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