State revenue grows as economy trudges on

Washington jobs still increase but slower in past 3 months; retail sales of food and beverage are up, forecaster says

Staff writerJuly 12, 2013 

Washington’s state government revenues grew again over the past month, ticking $7.5 million higher than predicted in the weeks-old forecast that helped Republican and Democratic legislators settle their sharp differences and pass a budget late last month.

The uptick really amounts to a blip — just 0.6 percent more than the quarterly forecast had predicted for the month — or a drop in the bucket of a twoyear state operating budget that spends $33.5 billion. The June forecast had already predicted a $231 million increase in revenues through the end of the budget cycle in June 2015, and a caseloads report had given lawmakers another $90 million of wiggle room to reach agreement.

The bonus revenue from June 11 to July 10 comes as the state jobless rate continues to fall, hitting 6.8 percent in May, and as retail sales were growing. But state economic forecaster Steve Lerch’s monthly report highlighted several conflicting trends — including an overall slowing in job growth and a recent decline in aerospace industry jobs.

“The Washington economy added just 7,100 jobs during the last three months for a 1.0 (percent) annual rate of growth,” the report stated. “In contrast, Washington employment growth had averaged 2.4 (percent) during the previous twelve months. Manufacturing employment declined 400 from February to May as a result of the loss of 900 aerospace jobs.”

Lerch noted that manufacturing other than aerospace added 500 jobs and construction employment rose by 1,300 over three months while government employment fell again by 100 jobs.

Lerch said that despite a recent drop of 1,700 aerospace jobs from its peak in November, he expects the downturn to be “relatively mild” because of back orders for jets and the productivity gains that led to the job cuts.

On the bright side, Lerch noted the housing market is tightening, which could bode well for construction. Personal incomes also were rising slightly faster than the forecast assumed last month.

The report said monthly state tax revenues grew by more than 5 percent on a year-over-year basis. The retail sector saw tax payments up 10 percent on a year-over-year basis, slightly above the previous month’s rate.

Top growth was seen in stores selling liquor since privatization began last year. Tax remittances from food and beverage stores rose 24.5 percent on a year-over-year basis in June compared with 11.2 percent for general merchandising stores. The rest of the retail sector grew by 8.2 percent.

Other strong retail sectors included drug and health stores, furniture and home furnishings stores, building materials and garden equipment sellers.

Brad Shannon: 360-753-1688   politicsblog

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