The preliminary February economic forecast is a (teeny) bit better than the November economic forecast upon which November revenue forecast was based. For both 2020 and 2021, state personal income is $6.4 billion higher in the new forecast than in the old. In the new forecast, state employment is 9,000 higher for 2020 than in the old and 11,000 higher for 2021…
Given the modest improvements in the economic forecast and the positive collections experience for non-REET sources, it is likely that the February 19 revenue forecast update will give legislative budget writers a bit more money to play with as they write their supplemental budget.
If consumer spending in the state is growing, part of that may be due to strong wage growth in the Seattle metro area. Geek Wire reports the metro area boasted the nation’s second strongest wage growth in the fourth quarter of 2019.
- The Seattle metro area saw the second-highest annual wage growth during the fourth quarter of 2019, according to PayScale’s latest wage trends report.
- Seattle had a 4.4% year-over-year spike, and a 0.9% increase from Q3.
Nashville came in No. 1, followed by Seattle, San Jose, San Francisco and Denver.
One more positive economic indicator: Solid job creation in January. The Associated Press reports,
U.S. companies added 291,000 jobs in January, a big increase from December, but much of that strength likely reflected unusually warm weather during the month.
Payroll processor ADP said Wednesday that the January job gain, which was larger than had been expected, compared to a revised December figure of 193,000.
Mark Zandi, chief economist at Moody’s Analytics, said that warmer-than-normal weather for January played a big role in the increase. He said without that impact, the job gain would probably have been around 150,000.
The ADP report is coming out ahead of the Labor Department’s release of the January jobs report on Friday. Many analysts expect that report will show a job gain of 150,000 in January, compared to 145,000 jobs in the government’s report in December. Analysts believe the unemployment rate will remain at a 50-year low of 3.5%.
We still expect a slowdown, but. maybe not just yet.