Memphis economy recovering for some but restaurants and entertainment still struggling

Shelby County, Tenn. — A new study shows Tennessee’s economy is recovering faster than other states after almost a year of shutdowns and closures.

“Tennessee was one of only seven states to have positive economic growth since April of 2020 when much of our economy was shut down, one of seven,” said Governor Bill Lee during his State of the State address Monday night.

According to the Opportunity Insights Tracker, consumer spending increased by 23 percent in Memphis as of January 24 compared to January 2020 before the pandemic hit.

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This spending growth is higher than the state’s average of 19 percent.

This Harvard University based team uses debit and credit card information to track how much people spent.

“Sometimes those metrics are good news, sometimes they’re not,” said Dr. John Gnuschke, Director of the Sparks Bureau of Business and Economic Research (SBBER) and Professor of Economics at the University of Memphis.

Dr. Gnuschke said economic growth is typically slow in Shelby county, even during good years.

“I think we are on the path to recovery but I believe it will take us some time to get a full bounce back to where we were at the end of 2019,” he said.

Opportunity Insights Tracker shows what many of us have seen firsthand - restaurants, and entertainment continue to struggle.

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According to the database, restaurant growth dropped almost 10 percent over the same time period in Memphis and entertainment and recreation spending took the biggest hit and dropped by more than 45 percent.

“Tourism, restaurants and entertainment have struggled and will continue to struggle until we get this pandemic under control,” said Gnuschke.

He said this recovery should be compared to a marathon, not a sprint.

“We’re going to see continued growth. We’re going to see a rebound that’s slow and it’s going to take us some time. We’re going to have two years of basically no growth,” said Gnuschke.