Monthly state revenue collections beat forecast expectations, but uncertainty continues to cloud projections.

Let’s take positive economic news where we find it. But let’s also keep our enthusiasm in check.

Yesterday’s monthly update from the Economic and Revenue Forecast Council contains an upbeat bottom line with respect to tax collections.

Major General Fund-State (GF-S) revenue collections for the June 11 – July 10, 2020 collection period came in $260.7 million (14.8%) higher than the June forecast. Revenue Act tax collections were $247.0 million (19.7%) higher than forecasted and other tracked revenue came in $13.6 million (2.7%) higher than forecasted. Most of this month’s surplus was from higher- than-expected taxable activity in retail trade, the result of the allowed May opening of non-essential retail establishments in a majority of counties.

The rest of the paragraph provides the all-important caution.

While increased June openings may bring another month of stronger-than-expected activity, it remains to be seen if the activity is sustainable or merely a temporary release of pent-up demand.

As we noted in yesterday’s post on UI claims, the governor has put a pause on reopening as COVID-19 cases are increasing. So, ERFC’s concern about sustainability appears to be validated, at least in the short term. The ERFC chart below shows how steep the revenue drop has been.

More on the report from the Washington Research Council.

Paul Roberts, business reporter for The Seattle Times, writes about yesterday’s increase in UI claims filings. The comments bring more focus to the current uncertainty.

Washington’s surge shows that “we did not see the V-shaped recovery that many were theorizing,” said Anneliese Vance-Sherman, ESD’s regional labor economist for the Seattle area, in an email…

As government restrictions and consumer anxieties continue to limit economic activity, Vance-Sherman said, “many businesses and workers that thought they could wait out the storm are facing a harsh reality.”

Again, we’re pleased to see a glimmer of good news in collections, but one swallow does not a summer make.