The latest update from the state Economic and Revenue Forecast Council builds on the recent U.S. Census Bureau report finding consumer spending was up 0.7% in September, well above expectations. Washington’s tax revenues are largely driven by consumer spending, and it’s clear consumers didn’t hold back last month.
The ERFC reports,
Revenue Act collections for the current period came in $79.8 million (4.9%) higher than the September forecast. Adjusted for large one-time payments and refunds, collections increased 15.8% year over year (see figure). The 12-month moving average of year-over-year growth increased to 13.1%. Seasonally adjusted collections decreased slightly from last month’s level…
Retail sales tax collections increased 16.3% year over year and B&O tax collections increased 22.4% year over year.
Washington Research Council economist Kriss Sjoblom writes,
The total amount received was $2,015.5 million, $152.7 million (8.2%) more than the amount expected under the (upwardly revised) forecast that ERFC adopted just three weeks ago.
Yes. Beating expectations. Other bullet points from the ERFC report:
U.S. employment increased by 194,000 jobs in September; the unemployment rate decreased to 4.8%.
Petroleum spot prices rose $10 per barrel over the last month.
For the 12 months ending September 2021, consumer prices increased by 5.4% (SA).
Seattle-area home price growth was the highest ever in July.
The 2020 Washington personal income estimate was reduced by $9.2 billion (1.8%).
Major General Fund-State (GF-S) revenue collections for the September 11 – October 10, 2021 collection period came in $152.7 million (8.2%) higher than forecasted in September.
Revenue Act collections were $79.8 million (4.9%) higher than forecasted and the sum of all other GF-S tracked collections was $72.8 million (30.6%) higher than forecasted.
We remain concerned that, while consumers appear ready to keep on spending, supply chain disruptions may make it more difficult to find items to purchase. Also, some of the revenue gain will be offset by rising inflation.