State economist Arun Raha has released his
March economic and revenue update and the usually humorous PhD has some good news and he has some bad news.
The good news is that the nation’s economic recovery appears to be continuing. The bad news is it hit a speed bump last month.
“Data point to weakness in housing, reductions in state and local government expenditures, weak consumer confidence and a stalling of
European growth,” Raha wrote. “On the plus side, output is still growing, job losses were less than expected, business spending on equipment and software has turned positive, and federal government expenditures continue to provide stimulus.
“Recoveries are not smooth events, and this one is no exception,” he wrote.
For Washington state, Raha said he continues to think the economy has turned the corner, citing a 10th straight month where leading economic indicators have increased. He also like the first monthly increase in employment and a surprising surge in housing permits.
“Overall, we remain comfortable with our February forecast,” he wrote. “The recovery in Washington’s economy is ongoing, but it will be slow and
uneven in 2010, gathering momentum in 2011.”
The most important number for legislative budget writers is actual revenue collections. Since Raha’s last forecast in February – the forecast being used to write the supplemental budget – collections are down $26 million.
In the high-number world of state government, that’s not much but would become a problem if it happened every month between now and the end of the budget period in June, 2011.
Raha, however, blamed what he called “timing factors.” That means taxable activity and the taxes collected from them should show up in later tax collection periods.