Preliminary state and national economic forecast posted anticipating March 20 revenue forecast; slightly more pessimistic

The March 20 state revenue forecast will shape legislative budget proposals. We’ve noted increased pessimism in national projections, including the fact that three-quarters of business economists predict a recession by the end of 2021. Nearly half of them expect the nation to slide into the downturn by end of 20201. The biennial budget that will be adopted this legislative session extends from July 1, 2019 through June 30, 2022. So the predicted slowdown comes in the middle of the state’s spending plans.

For those of a mind to speculate, the Economic and Revenue Forecast Council posts a lot of good data. Today, the ERFC put up the March  preliminary economic forecast. Here are the memo and forecast comparison tables, calendar year summary tables, and fiscal year summary tables. 

Sorting through all that is something we’ll leave to others. But our brief review of the documents finds some confirmation of a slightly more pessimistic outlook.

From the memo, we see a very small dip in employment projections and income projections.

We expect 2.1% Washington employment growth this year compared to 2.2% in the November forecast. As in November, we expect growth to decelerate. We expect employment growth to average 1.1% per year in 2020 through 2023, which is the same rate as in the November forecast. Our forecast for nominal personal income growth this year is 4.6%, down from 4.7% in the November forecast. Our new forecast for nominal personal income growth in 2020 through 2023 averages 4.8% per year, the same rate as in the November forecast.

The data will be discussed at the Economic Review March 7, feeding into the March 20 Revenue Review.