And it’s still an ugly picture. We check out the economists’ reports day by day, and they don’t seem to be getting any better.
Here’s the unabridged executive summary from the report out today from the Washington Economic and Revenue Forecast Council. See how many bright spots you can find in it.
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We are in the fragile aftermath of the Great Recession where a return to normalcy seems like a mirage in the desert – the closer we get to it, the further it moves away. Fear and uncertainty have overwhelmed consumer and business behavior. The risk of a recession has increased significantly.
Revisions to U.S. real Gross Domestic Product show a much deeper recession than previously estimated, and a U.S. economy close to stall speed in the first half of this year.
Our previous forecast prior to these data revisions had expected growth regaining momentum in the second half of 2011 as oil prices stabilized, and supply chains were restored with Japan rebuilding. Now that it turns out that there was no growth momentum in the first half of the year, a second half return to momentum seems unlikely.
The likelihood of a full-blown European debt crisis, and the consequent ripples across the global economy have increased.
Washington’s economy is not immune to national and global economic developments. Like the nation, the outlook for the Washington economy has weakened since June.
The employment recovery in Washington this recession has been the weakest of any post-war recovery. Labor market conditions since the June forecast have been worse than anticipated.
The recovery in state housing and construction will be later than previously expected. New construction faces headwinds from rising foreclosures and falling home prices.
Washington is still expected to outperform the nation in employment and personal income growth, although the outlook for both has been lowered substantially.
General Fund-State revenue for the 2011-13 biennium is now forecasted to be $1.4 billion less than forecasted in June.
The preliminary General Fund-State total for the 2009-11 biennium came in $24.9 million below the June forecast.
The downside risks to the outlook have risen and exceed the upside risks by a wide margin.