Local economy is relatively strong despite rising costs, UHERO says
Economists are watching consumer spending for any signs of a slowdown.
Carl Bonham, the executive director of the University of Hawaiʻi Economic Research Office, says the economy is still in relatively good shape — but inflation remains the biggest threat.
"The economy is holding up reasonably well despite the headwind from higher inflation and the continued lack of Japanese visitors," he said. "And so when you sort of pull everything together, you kind of have to worry a little bit more about the fall and into 2023, about more slowdown, a little bit less job growth, a little bit higher unemployment, fewer visitors as the U.S. economy slows down — and we're yet to see the recovery of, as I said, Japanese visitors."
"And then there's the real challenge of people basically having to cut back on spending because of inflation," Bonham told HPR.
Bonham says that for those with household incomes in the bottom 20% of the state, inflation accounted for a 9% tax on their incomes this spring.
That means those folks will need to pay 9% more, or several thousand dollars, to maintain their current spending.
This interview aired on The Conversation on July 21, 2022. The Conversation airs weekdays at 11 a.m. on HPR-1.