The Economic and Revenue Forecast Council has released its September 2019 preliminary economic forecast. It’s the first step in a process ERFC leading to the official revenue forecast:
During a typical forecast cycle, the Chief Economist and staff of the Forecast Council (ERFC) meet with the Forecast Work Group to discuss the preliminary U.S. and state economic forecasts.
ERFC produces preliminary economic forecasts for the U.S. and Washington. In September, he preliminary forecasts are then reviewed and discussed by the Governor’s Council of Economic Advisors (GCEA) in the presence of the Governor and members of the Economic and Revenue Forecast Council.
Once the final economic forecasts for the U.S. and the state are completed, work begins on the General Fund-State revenue forecast. The economic forecasts are completed first because data from the economic forecasts are used to produce the revenue forecasts.
These preliminary assessments provide a good overview of the current state of the national and Washington economies. Key conclusions:
We expect 1.9% Washington employment growth this year, down from 2.2% in the June forecast. As in June, we expect growth to decelerate. We expect employment growth to average 1.3% per year in 2020 through 2023, up slightly from 1.2% in the June forecast. Our forecast for nominal personal income growth this year is 5.7%, up from 4.9% in the June forecast. Our new forecast for nominal personal income growth in 2020 through 2023 averages 4.9% per year, the same rate as in the June forecast.
In other economic news, The Wall Street Journal reports personal consumption remains strong.
U.S. households ramped up their spending in July, continuing to underpin the economy’s expansion as manufacturing cools and global growth slows.
Personal-consumption expenditures, a measure of household spending, increased a seasonally adjusted 0.6% in July from June, the Commerce Department said Friday.
Consumer spending is the driving force behind the U.S. economy, accounting for more than two-thirds of total demand. Solid spending bodes well for third-quarter growth.
From the BEA report:
Personal income increased $23.9 billion (0.1 percent) in July according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $44.4 billion (0.3 percent) and personal consumption expenditures (PCE) increased $93.1 billion (0.6 percent).
Real DPI increased 0.1 percent in July and Real PCE increased 0.4 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.
As the Associated Press notes, that increase in DPI is not great.
The Commerce Department also said Friday that personal incomes rose just 0.1%, the smallest gain in 10 months.
Things seem to happen swiftly these days. The official revenue forecast for the state will be released September 25.