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How higher holiday spending impacts Arkansas's economy

Black Friday sales this year topped $9.1 billion, but a UALR economist explains that the rise in spending doesn't necessarily mean there were more purchases.

ARKANSAS, USA — Between gifts and travel, the holidays can get expensive, and if you factor in inflated prices you could be seeing an even bigger price tag.

Even after many years of pandemic strain on the holidays, the prices haven't been slowing down shoppers or travelers.

Adobe Analytics reports have shown that online sales on Black Friday topped $9.1 billion. The National Retail Federation also showed that over 166 million Americans also did some holiday shopping on Black Friday—  which was 8 million more than last year.

UALR economist Michael Pakko explained how "Typically, the holiday season is the biggest time of the year for retailers."

Pakko also added that this year's rise in spending doesn't necessarily mean more purchases.

"Inflation in a way fosters even more spending because if you're wanting to continue to purchase the same quantity of goods, you have to actually spend more money on that," Pakko said.

Therapist NaTasha Thorne with Eunoia Therapy and Self Development said that even as people have been battling inflation, there is actually a psychological reason behind the record spending— COVID fatigue.

"After everything that has, you know, transpired over the last two, two and a half years, I think people are really just trying to search for a sense of normalcy," she said.

Thorne also shared that searching for pre-pandemic times can lead people to look past high price tags.

"To get back to that sense of normalcy, you know, just to get back to that sense of control... so the money at this point, just kind of become secondary," she described.

That craving for pre-COVID feelings, in some cases, has actually become an economic reality.

Arkansas's tax revenue for hospitality and tourism, are both above 2019 levels.

Pakko said that these spending trends could keep the economy moving along for a while longer.

"Persistence of consumers is going to carry us through this holiday season... then maybe the hangover will hit after January and we'll see some drop off in consumer spending then," he added.

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