UA economist sees ‘soft landing’ for economy as a strong possibility

by Roby Brock (roby@talkbusiness.net)

Mervin Jebaraj, economist with the University of Arkansas Walton College of Business, offers a gymnastics analogy for the Federal Reserve Bank’s handling of the tumultuous economy.

Observers have wondered if the aggressive hike in interest rates could pull inflation under control without crashing the economy and causing a recession. Jebaraj said, so far, it’s been a pretty well-done routine.

“As far as a ‘soft landing’ goes, I think you can safely say that the Federal Reserve has stuck a ‘soft landing’ in 2023. Now if you ever watch those gymnastics, you can get like one to two extra steps before you steady yourself, so that’s where we are and heading into 2024,” he said.

UA economist sees ‘soft landing’ for economy as a strong possibility

State of the State Mid-Year 2023: U.S., Arkansas economies to be pressured but won’t falter

by Michael Tilley (mtilley@talkbusiness.net)

Just a few months ago, it was considered a surprise if the U.S. economy did not enter into a recession, even if shallow. The more widely held belief now is similar to that of economist John Shelnutt who says the U.S. economy shows “no sign of faltering.”

Shelnutt, director of economic analysis and tax research at the Arkansas Department of Finance and Administration, told Talk Business & Politics that real U.S. GDP growth will remain resilient even “under the accumulated weight of interest rate hikes by the Federal Reserve.”

Goldman Sachs on July 19 lowered its closely watched recession odds from 25% to 20% but said economic growth may slow in the near term.

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-u-s-arkansas-economies-to-be-pressured-but-wont-falter/

State of the State Mid-Year 2023: Arkansas’ tourism industry booming

by Tina Alvey Dale (tdale@talkbusiness.net)

Many spots in Arkansas continue to see record visitation in 2023 making tourism a strong part of the state’s economy, according to the Arkansas Department Parks, Heritage and Tourism (ADPHT).

Interim ADPHT Secretary Shea Lewis said May 2023 tourism collections were up 5.6% over May 2022, making it the highest collections for the month of May so far and the 27th consecutive month that Arkansas tourism has set a new monthly collection record.

“We are also up 9.8% year to date over 2022,” Lewis said.

Also, The Arkansas Tourism Ticker shows that healthy gains to begin 2023 for the state’s leisure and hospitality sector are continuing. Arkansas’ tourism tax is up more than 10% between January and April, with average tourism sector jobs up more than 5% in the first four months of 2023. The Arkansas Tourism Ticker is managed by Talk Business & Politics, and sponsored by the Arkansas Hospitality Association.

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-arkansas-tourism-industry-booming/

Weekly Update from State Representative DeAnn Vaught

This week we received the Fiscal Year 2023 Revenue Summary. It shows we ended the fiscal year with the second-largest surplus in state history.

Results from collections and distributions for FY 2023 reached $7.185 billion. That is $1.161 billion in excess of the full funding level for the Revenue Stabilization Act representing a surplus.

The 2023 fiscal year ended above forecast in all major categories of collections and above year-ago levels in sales tax collections. The Arkansas Department of Finance and Administration says this broad-based gain resulted from another year of high growth in sales tax collections and less decline in income tax categories than expected from tax rate reductions.

The 94th General Assembly passed Act 532 which reduced the state’s top income tax rate from 4.9% to 4.7%. As a result, individual income tax collection was less than the previous year but still $42.4 million above what economic forecasters predicted.

Sales and Use tax collections for FY 2023 were $263.6 million or 8.4% over FY 2022. Corporate income taxes saw an increase of $5.3 million or .6% above FY 2022.

In the 2023 Regular Session, the General Assembly passed Act 561 which authorized the transfer from the previous year’s unobligated surplus funds and up to $380.6 million in projected surplus funds from this year to the restricted reserve fund. Act 561 prioritizes spending of the restricted reserve fund on projects such as educational facilities, correctional facilities, the state crime lab, teacher academy scholarships, and the UAMS National Cancer Institute Designation Trust Fund.

Revenue reports help guide our decision-making when it comes to state spending and tax reduction.

The FY 2023 Revenue Report shows us that our state’s economy is growing and outperforming expectations. In fact, for the month of June alone revenues were above forecast and year-ago levels in all major categories.

We’ve posted the revenue summary at arkansashouse.org.

PARP offers opportunity for additional relief to underserved farms with pandemic-related losses

By Mary Hightower
U of A System Division of Agriculture  

LITTLE ROCK — Underserved farmers who suffered pandemic-related losses have until July 14 to apply for funds from the Pandemic Assistance Relief Program, or PARP.

PARP was created to expand the existing pandemic relief programs and to target overall revenue loss rather than just price losses, said Ryan Loy, extension economist with the University of Arkansas System Division of Agriculture.

Extension agronomist Ryan Loy says there's a limit to the time to apply and the amount of funding available through PARP. (U of A System Division of Agriculture photo by Kerry Rodtnick)

PARP is a lesser-known program that follows on the heels of other pandemic-relief programs including the Coronavirus Food Assistance Programs, known as CFAP 1 and 2, the Pandemic Livestock Indemnity Program Spot Market Hog Pandemic, and the 2020 Emergency Relief Program. The program is part of the Consolidated Appropriation Act of 2021.

“It’s mainly the fact that the federal government had leftover funds,” Loy said. The U.S. Department of Agriculture “said ‘Let’s try to reach producers that we weren’t able to reach before with CFAP and ERP and programs along those lines’.

“The goal with PARP is to actually focus on underserved producers,” he said. “There’s kind of a laundry list of eligibility. I would suggest to any producer who is interested, to either go to farmers.gov — it’s right there on the front page — or call your local Farm Service Agency office. If you come to the FSA office with your 2016-2020 tax returns, they’ll basically do it all for you.”

Who’s eligible?

Loy said eligibility extends to any producer or entity that participated in agricultural production during the 2020 calendar year.

“PARP is also written to include cattle feeder operations that were previously denied assistance under CFAP 1 and 2,” Loy said. “The producer must have suffered at least a 15 percent decrease in allowable gross revenue for 2020 as compared to either 2018 or 2019 calendar year.

Deadline approaching

The clock is ticking both on the time and funding available, Loy said.

“There are two weeks left, however, it’s first-come, first-served,” he said. “A producer is eligible for up to $125,000. That’s the most they’ll pay, but it is subject to available funds. So, let’s say you put in your application in January, there is a pretty good likelihood that you’ll get paid relatively sooner than someone who applies a little later.”

Taxable payment

“This is a direct payment. It’s not a loan, you don’t have to pay it back,” Loy said. “Something that is important to know is that this is taxable income because it is a direct payment to you.”

PARP targets whole-farm allowable gross revenue losses in 2020 compared to the producer’s allowable gross revenue in 2018 or 2019. A producer can choose to elect losses on either year as their benchmark or based on their expected gross revenue in 2020 if they did not farm in either 2018 or 2019.

Gross revenue is the aggregation of the value of a producer’s crops. The allowable gross revenue is based on the net farming loss or profit from Schedule F, minus any pandemic-related aid already received by the producer.

For more information, please visit farmers.gov or contact your local FSA office.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on Twitter and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.du/. Follow us on Twitter at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on Twitter at @AgInArk.

Trucking industry leader discusses economy, workforce challenges

by Roby Brock (roby@talkbusiness.net)

The president of the Arkansas Trucking Association, Shannon Newton, has seen plenty of ebbs and flows in her career leading and working in the transportation industry.

Economists and trucking executives are calling current industry conditions a “freight recession” which is causing a cyclical adjustment for companies throughout the nation’s supply chain.

“It’s very much like a recession-recession,” Newton said of a freight recession. “I think we’ve defined it kind of as a contraction in the demand over some sort of measurable period. The industry numbers indicate a contraction demand two months in a row. What you see is essentially the freight economy leading the anticipated recession that hasn’t really come.”

https://talkbusiness.net/2023/06/trucking-industry-leader-discusses-economy-workforce-challenges/

State of the State 2023: Slower economic growth likely, with rebound in 2024

by Michael Tilley (mtilley@talkbusiness.net)

The U.S. and Arkansas economies may have 99 problems, or more considering inflation, but a recession in 2023 ain’t one of them. Probably not, anyway. Or at least not a deep recession, according to arguably a growing consensus among economists.

John Shelnutt, Arkansas Department of Finance and Administration director of economic analysis and tax research, doesn’t anticipate a deep or disruptive U.S. recession in 2023.

“Most U.S. economic forecast groups currently have either a shallow recession in the first half of 2023 or a below-trend growth period during the year,” noted the economist who provides tax revenue guidance for Arkansas officials. “The differences are minor and derive from small variations in growth for personal consumption expenditures (PCE), the largest GDP component. Even the shallow recession camp of forecasts shows weak positive gains for PCE in inflation-adjusted (real) terms.”

https://talkbusiness.net/2023/01/state-of-the-state-2023-slower-economic-growth-likely-with-rebound-in-2024/

Economists: U.S., Arkansas economies not likely to see recession in 2023

by Kim Souza (ksouza@talkbusiness.net)

According to three economists who spoke Friday (Jan. 27) at the 29th annual Arkansas Business Forecast Luncheon held in Rogers, Arkansas and the U.S. will likely avoid economic recession primarily because of continued job and wage growth.

Around 1,000 people attended the event, according to officials with the Center for Business and Economic Research (CBER) at the Sam M. Walton College of Business at the University of Arkansas.

Simmons Foods CEO Todd Simmons was the moderator for the event and said three areas of concern from his perspective included the need for affordable housing in Northwest Arkansas to ensure people continue to move here. He also said the region’s population growth over the past decade has taxed transportation infrastructure, and keeping up with the higher demand is crucial to ongoing growth. Lastly, he said workforce development is imperative for the region’s future growth.

https://talkbusiness.net/2023/01/economists-u-s-arkansas-economies-not-likely-to-see-recession-in-2023/

AUDIO: Governor Hutchinson’s Weekly Address | Helping with Housing Stability

There is no question that many families suffered financial setbacks as the coronavirus swept across the nation two years ago. Today I’d like to discuss my vision to stabilize housing and to assist Arkansans with opportunities to move up the economic ladder.

Arkansas’s unemployment rate rose to more than 10 percent in the early months of the pandemic. The federal government stepped in with Emergency Rental Assistance, which allowed many to remain in their homes and softened the financial blow for landlords.

But our economy has returned, jobs are plentiful, and our unemployment rate is even better than before the pandemic. Many still are recovering, but as employment opportunities abound, we are returning to our pre-pandemic assistance programs.

Our goal is to educate Arkansans so they can move into trades that will allow them to build a career that will support their family. We must do more than pay the rent.

Arkansans want to work. We recognize the dignity that comes with earning a living rather than a lifetime of accepting help. For this to work, we must assess the needs of individuals. What training does a person need? What challenges prevent a parent from finding a job? Some need help to overcome a mental illness or an addiction to alcohol or another substance.

We still have programs that assist renters, including the Emergency Solutions Grants, the Community Services Block Grants, and the Low-Income Home Energy Assistance Program.

Arkansans’s belief in the value of work has been a foundation of my approach to lending a government hand to those in need. I recently informed the U.S. Treasury that Arkansas would accept no more than about $58 million in funds the federal government is offering through the second round of  the Emergency Rental Assistance program. That is about 39 percent of the total the state was offered.

We still have approximately $16.5 million available in housing stability funds through other programs, and that includes more than $6 million for rental assistance. So we don’t need the entire $146 million the federal government offered. The money we do accept from the second round of Emergency Rental Assistance could better be used to continue pilot programs with various nonprofits from Our House to Restore Hope and others, or to start new programs that promote housing stability.

I thought long and hard about whether to accept all of the federal funds, but I didn’t think we should take the money when we already have rental assistance funds available through other programs. It makes no sense to start an absolutely new rental-assistance program that would make it too easy for people to accept help rather than improve their job skills.

The federal money also came with strings and limited our flexibility in program-integrity efforts.

We are not going to ignore the needs of Arkansans. Community action agencies throughout the state can distribute aid from the remaining funds.

But now that we are putting the pandemic behind us, we must focus on giving Arkansans the best kind of help, which is the chance to train and the ability to succeed. Our goal is not only to help someone find work today, but to help them achieve the dignity and pride of putting their family into a house and putting food on the table.

Grain, fertilizer, fuel prices impacted by Russian war in Ukraine

by George Jared (gjared@talkbusiness.net)

Russia’s invasion of Ukraine has impacted many economic sectors on a global scale and agriculture will be directly affected on several fronts. Grain markets have become more volatile and high fertilizer and fuel prices are going even higher.

Russia and Ukraine account for about 29% of global wheat trade and Russia is the world’s top wheat exporter. Ukraine accounts for about 16% of global corn exports. Scott Stiles, agricultural economist for the University of Arkansas System Division of Agriculture, said the situation will offer both opportunities and hardships for growers in Arkansas and elsewhere.

Oil prices traded at more than $122 per barrel on Monday (March 7) after it spiked for a short time to $130 per barrel. Gas prices inched towards all-time highs across the U.S. at $4 per gallon. Diesel prices are even higher and several analysts predict oil could rise to $200 a barrel before the conflict is over.

https://talkbusiness.net/2022/03/grain-fertilizer-fuel-prices-impacted-by-russian-war-in-ukraine/

Arkansas Tax Revenue Surplus More Than $700 million; Year-To-Date Collections Up 11%

By TALK BUSINESS & POLITICS STAFF

Calendar shifts with tax filing, an improving economy and federal stimulus payments helped boost April tax revenue almost 20% more than the forecast, and pushed the state’s year-to-date revenue surplus – “net available revenue” collected beyond the estimate – to $716.8 million.

The Arkansas Department of Finance and Administration (DFA) reported Tuesday that gross revenue for fiscal year-to-date (July 2020 to April 2021) is $6.43 billion, up 11.1% compared with the same period in 2019-2020 and up 12.4% over the budget forecast. Part of the gain includes a shift in collections when the 2020 tax due date was moved from April to July, according to the DFA report.

https://www.ualrpublicradio.org/post/arkansas-tax-revenue-surplus-more-700-million-year-date-collections-11

CREDIT KUAR NEWS

Latest Arkansas Revenue Report Shows Continued Above Forecast Growth

By SARAH KELLOGG

Arkansas’ economy continues to outperform its forecasts, according to the most recent revenue report.

The December revenue report, released Tuesday by the Department of Finance and Administration, shows the state’s net available general revenue totaled $530.3 million for December, which is 7.3% above forecast, but $17.2 million or -3.1% below last year’s amount. For the full story, click on link below:

https://www.ualrpublicradio.org/post/latest-arkansas-revenue-report-shows-continued-above-forecast-growth

The latest revenue report, totaling at $530.3 in net available general revenue for December is 7.3% above the state's forecast

CREDIT STOCK PHOTO

State Economists: Resurgence Likely to Depend on Pace of Vaccine Vistribution, Extent of Federal Help

by Michael Tilley (mtilley@talkbusiness.net)

Modeling 2021 economic conditions may be akin to trying to hit a satellite with a BB gun. The virus is expected to rage well into the year, even with vaccines. Some dramatic changes in consumer and worker behavior could become trends. An additional federal stimulus may be stimulative. Or not. Add to all that the entry of a new U.S. president.

Good luck hitting the satellite, and don’t put your eye out with that thing.

Michael Pakko, chief economist and state economic forecaster at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock, addresses the point of unusual uncertainty with any 2021 financial analysis.

https://talkbusiness.net/2020/12/state-economists-resurgence-likely-to-depend-on-pace-of-vaccine-distribution-extent-of-federal-help/

Census Report: COVID-19 Economic Fallout Dire in Several Industries

The ongoing COVID-19 pandemic has hit the U.S. economy hard and the fallout on several economic sectors remains dire, according to a report released Wednesday (Nov. 4) by the U.S. Census Bureau.

The report looked at how social distancing and safe-at-home practices have brought catastrophic declines to industries such as transportation, entertainment and child care through the first half of 2020.

https://talkbusiness.net/2020/11/census-report-covid-19-economic-fallout-dire-in-several-industries/

Census Report: COVID-19 economic fallout dire in several industries - Talk Business & Politics

The ongoing COVID-19 pandemic has hit the U.S. economy hard and the fallout on several economic sectors remains dire, according to a report released Wednesday (Nov. 4) by the U.S. Census Bureau. The report looked at how social distancing and safe-at-home practices have brought catastrophic declines to industries such as transportation, entertainment and child care through the first half of 2020.

Arkansas Poll Finds Healthcare, Economy Biggest Concerns for Voters

The 22nd annual Arkansas Poll reports voters are most concerned about healthcare and the economy amid the pandemic. Politics was a top issue for more than 20 percent of respondents for the first time in the history of the poll.

https://www.kuaf.com/post/arkansas-poll-finds-healthcare-economy-biggest-concerns-voters

Arkansas Poll Finds Healthcare, Economy Biggest Concerns for Voters

The 22nd annual Arkansas Poll reports voters are most concerned about healthcare and the economy amid the pandemic. Politics was a top issue for more than 20 percent of respondents for the first time in the history of the poll.

Arkansas Poll Finds Healthcare, Economy Biggest Concerns for Voters

The 22nd annual Arkansas Poll reports voters are most concerned about healthcare and the economy amid the pandemic. Politics was a top issue for more than 20 percent of respondents for the first time in the history of the poll.

https://www.kuaf.com/post/arkansas-poll-finds-healthcare-economy-biggest-concerns-voters

Arkansas Poll Finds Healthcare, Economy Biggest Concerns for Voters

The 22nd annual Arkansas Poll reports voters are most concerned about healthcare and the economy amid the pandemic. Politics was a top issue for more than 20 percent of respondents for the first time in the history of the poll.