The Economic and Revenue Forecast Council released the update for May 11 – June 10 and it continues to report strength in the state economy. We review it briefly below, but first this graph from the report nicely depicts the revenue trends. Onward and upward.
Here are the bullet points from the report:
- The U.S. economy added 38,000 net new jobs in May, the smallest increase since September 2010.
- Real U.S. GDP growth for the first quarter of 2016 was revised from 0.5% to 0.8% at a seasonally adjusted annual rate.
- Oil and gasoline prices continue to increase.
- Washington job growth has been strong.
- Washington manufacturing dipped back into negative territory in May.
- Major General Fund-State revenue collections for the May 11 – June 10, 2016 collection period came in $77.8 million (3.8%) above the February forecast.
- Cumulatively, GF-S collections are now $217.9 million (3.8%) higher than forecasted.
In early June we wrote that the ERFC reported the state economy was “very slightly weaker,” but still better than the nation as a whole. This update shows little evidence of current weakness.
Some other highlights from the update:
We have three months of new Washington employment data since the February forecast was released. Total nonfarm payroll employment rose 16,500 (seasonally adjusted) in February, March, and April, which was 3,000 more than the 13,600 expected in the February forecast. The construction sector more than accounted for the variance in job growth, adding 2,900 jobs in the three-month period; the February forecast expected a reduction of 1,200 jobs. Manufacturing employment declined 2,400 of which 1,400 were in the aerospace sector.
…Revenue Act collections for the current period came in $43.9 million (4.1%) above the February forecast. Cumulatively, Revenue Act collections are now $111.4 million (2.6%) higher than forecasted. In the March-April collection period, however, there was a $7.1 million audit payment that was not included in the forecast. Without this payment, collections would have been $104.4 million (2.5%) higher than forecasted.
Adjusted for large one-time payments and refunds in the current and year-ago periods, collections grew 9.5% year over year. The 12-month moving average of year-over -year growth increased to 7.0%. Seasonally adjusted collections increased from last month’s level .
We still expect little change in the forecast, which will be released on Wednesday, June 15. As we wrote earlier: “so far, so good.”
UPDATE: Washington Research Council economist Kriss Sjoblom expects a significant upward revision in Wednesday’s forecast. That’d be fine with us.
