The Senate committee on economic development is looking at the state of the state’s economy today.

When it comes to unemployment, Washington is somewhere in the middle of the pack. The smallest states — North Dakota, Nebraska, South Dakota, New Hampshire and Vermont — have the lowest unemployment, ranging from 3.4 percent to 4.5 percent. Washington’s unemployment, however, is about double that.

“The industries most affected by the recession are associated with housing, financial services, construction,” said Greg Weeks, director of the Employment Security Department. He said the pattern of the “tepid” recovery has been lead by a 15,000 job gain in manufacturing in the last year. Government, however, has been a drag — losing thousands of employees.  “The recession started and was hitting private industries first … and as they start to come out, then the tax ramifications of those cuts hit the public sector,” leading to job reductions in state and local governments.

State job recovery has been below par, Weeks said. “This recession has just hammered our state and we’re recovering slowly,” he said.

After Weeks was finished, Arun Raha, the state’s top economist — who announced that he’s leaving at the end of the month — presented. “What we said in the November forecast is coming true,” he said.

“If I had to make the forecast today … I would not anticipate having to make any significant up or down revisions” from the previous forecast, he said. (more…)

Tags: economy, unemployment

Today at 9:30 a.m., tune to TVW to watch Gov. Chris Gregoire hold a media availability on “next steps” in the budget. This comes a week after the state’s chief economic forecaster predicted the state will see about $1.4 billion less in revenue over the next two years.

Tune in today and read all about it right here.

Tags: Budget, economy, Governor, special session

“These are not normal times,” said Arun Raha, the state’s top economist, in opening up his presentation on the Economic and Revenue Forecast (which you can watch live on TVW). “Fear and uncertainty have overwhelmed” consumer behavior, he said. Political gridlock in the other Washington has lead to uncertainty. And Europe’s economic troubles are affecting our own economy.

He said the probability of a double-dip recession has increased, though it’s too early to say if it will. Because of all these economic factors, Raha said he expects the state to take in $1.4 billion less in the two-year budget cycle than he estimated just last quarter.

“There are still over 6 million fewer jobs nationally than there were at the start of this recession,” he said, illustrating the term “jobless recovery.”

Raha said even though most of those in the audience weren’t surprised by the forecast, it’s still “truly troubling.” He said the best he can hope for is that we don’t slip into another recession.

In the Q&A portion, lawmakers said there may be a need for a brief special session to handle the lack of revenue.

Tags: Budget, economy, Revenue forecast

If you’re just looking at the state’s unemployment rate, nothing has changed: We’re still at 9.3 percent, which means nearly 310,000 people are unemployed and looking for work.

But the state has added jobs for every month of the last year. That means there are now 46,600 more jobs in the state than this time last year.

“At some point, there will be a tipping point where the constant job growth starts eroding the unemployment rate,” said Dave Wallace, acting chief economist for Employment Security.

You can read the full report here.

Tags: economy, Jobs, unemployment rate

The Employment Security Department announced this morning that, despite adding 5,700 jobs to the economy, the state’s unemployment rate has held steady at 9.3 percent.

This marks the eleventh month of job gains — but those gains haven’t been substantial enough to touch the unemployment rate.

Industries responsible for adding those 5,700 jobs include leisure and hospitality, manufacturing, retail trade, transportation, warehousing and utilities, professional and business services, financial activities, construction, and government. Meanwhile “other services” and information lost jobs.

Need help finding a job? Go to WorkSource. Want to view the full report? Go here.

Tags: economy, Jobs, recession, unemployment rate

Budget director Marty Brown is asking state agencies to submit more proposed cuts.

The state budget picture must not be looking good: Marty Brown at the Office of Financial Management has sent out a memo on behalf of Gov. Chris Gregoire asking all state agency directors to submit a proposal for 5 percent “first priority” cuts — and an additional 5 percent cut for a total of 10 percent.

The reason? Brown says in the memo that the “near-term economic outlook has weakened since June,” when the last Economic and Revenue forecast was issued. And he says there’s a “distinct possibility” that further revenue losses are on the way in the coming year.

And what will those cuts look like? The Washington Policy Center has the chart from OFM here.

The agencies were asked to assume a January start date for cuts that couldn’t be implemented immediately. And they were warned that, as OFM monitors the economic conditions, the target could be revised.

The next ERFC Economic Review is on Sept. 2 at 2:30 p.m. TVW will cover that, as usual. And we’ll be there two weeks later for the Sept. 15 Economic and Revenue Forecast – when we’ll find out if the forecast is indeed down. But that’s not all:  Before session, we’ve also got the November forecast to deal with.

Tags: Budget, cuts, economy, OFM

Gov. Chris Gregoire just held a press conference in her office to discuss her trade mission to Asia and the upcoming Economic and Revenue Forecast. Here are some notes and quotes:

On the Revenue Forecast:

- Gregoire signed an executive order today that dictates what across-the-board cuts should be made to correspond with a drop in the revenue forecast. She earlier called for agencies to ready for 4 to 7 percent cuts. Now, she said, she thinks it could be more dire.

- “I don’t see 10 percent, but I do think it’s above 7 percent,” she said. She also said there’s “no question in my mind” that the news on Thursday will be bad.

- A 1 percent cut is equal to $82 million, she said.

- “Assuming we’re going to see some better (economic) trends, I don’t expect it this year.”

- Podiatry, hospice care: “Some of these programs are going to be gone this year.” (more…)

Tags: Asia trade mission, Budget, cuts, economy, Gregoire, recession

This week’s Q&A is with Sheryl Hutchison, communication director for the Employment Security Department. The department is responsible for tracking employment statistics, maintaining WorkSource offices around the state and much, much more.

Q: What’s the latest unemployment rate? Is the economy recovering yet?

Hutchison: Let’s start with the first question. We announced today that the unemployment rate in June dropped to 8.9 percent, which is the lowest since April, 2009. That’s obviously a better direction.

The next set of statistics for July will come out Aug. 17.

In all likelihood what we’ve been seeing when the rate has dropped as much as this one did, chances are it will be revised up to 9 percent.

But, it’s just exciting to see something less than 9 percent. This is the third month in a row that it has declined. Since the start of the year, we’ve had a net job growth in this state of more than 23,000 jobs. For us, that’s a lot more exciting than what the unemployment rate is. You’re seeing things turn around – it’s not a steep U-shaped recovery where it’s going right back up. But it is the right direction….last year (in the same five-month period) we had lost about 77,000 jobs. So that’s a big sea change.

Q: Part of high unemployment is that it depletes the Unemployment Insurance trust fund. When the Legislature increased the benefit payout, there was some concern the trust fund would be depleted too far. Where does that stand?

Hutchison: We still have the healthiest trust fund in the country. Thirty five states and territories have bankrupted their trust funds. Furthermore, we do not anticipate triggering any surcharges.

One of the benefits going into the recession with a healthy trust fund is it allowed us to increase benefits. At the end of May, the trust fund reserves were at 13.9 months. Typically, the federal government advises that you go into the recession with at least 12 months. We’ve come down, but we’re still healthy.

Q: Do you anticipate the fund dipping further?

Hutchison: No, we really don’t.  Part of the reason is that through our governor and the Legislature, we’ve created a responsive system that reacts before we get to a critical stage. The result is you do start to see taxes start to rise, but it should happen in a gradual manner — rather than in other states when you see these sharp ups and downs, ours will kind of undulate for a while. They’ll go up for two or three years – that provides more stability.

Q: Have rates increased already?

Hutchison: They did start to increase this year. They’ll go up a little bit again next year. Probably … in 2012 they’ll start to flatten out. We don’t know yet – there’s a lot to happen between now and then. In 2011 it’ll go up again a bit more.

We call them “taxes,” but for the most part it’s really an insurance system with insurance premiums. So if you’re an employer who uses the program more, you’re going to pay a higher premium than an employer who doesn’t.

But it is an insurance system, which means shared costs. Some people who don’t use it at all are going to pay some of the freight for the people who do. There is more cost shifting going on right now – the people who haven’t used it are having a larger percentage increase than those at the top.

Q: Are you hearing complaints about that? From people who haven’t laid anyone off but are seeing a large increase in their premiums?

Hutchison: You always do. No one likes taxes. Some understand the system – they’ve been with it for a long time. If you’re someone at the bottom of the system whose rate is small – less than 1 percent of payroll – you might have seen your premiums double.
There’s two parts of the rate – there’s the experience rating and then there’s the piece that’s a socialized cost. That cost-shifting component varies more frequently. Experience rated taxes are averaged out over four years. They’ll see some increase over four years rather than just in one year. But it does mean there’s more cost shifting right now to make up for the loss in the trust fund. Our system is designed to increase the socialized cost to help even that out.

Q: Let’s talk about the Unemployment Insurance changes required by federal law. What needs to happen, and when does the Legislature need to make changes?

Hutchison: The Department of Labor has been encouraging states to do what we call “modernize” the unemployment system. (more…)

Tags: economy, Thursday Q&A, unemployment, WorkSource

I just returned from a two-hour bus tour of high-speed rail projects funded by federal stimulus money.  The tour was part of a Joint Transportation Committee meeting in DuPont today.  Washington received $590 million to improve passenger service throughout the I-5 corridor.  We ask lawmakers if the improvement projects will really get people out of their cars and onto the rails.  Sen. Mary Margaret Haugen, chair of the Senate transportation committee, talks about her long-term vision for high-speed rail service extending to eastern Washington. On set, I’ll be talking with a rail expert from the Washington Department of Transportation.

Also on The Impact this week, the state’s top economist Arun Raha joins me in the studio to talk about his newly released economic and revenue update. You’ll hear his latest predictions on construction, manufacturing, unemployment and tax collections.

You can watch The Impact Wednesday nights at 7 p.m. and 10 p.m. on TVW and on our new channel KBTC on Friday nights at 7 p.m.

Tags: economy, High speed rail, The Impact

Tags: banks, economy, Gregoire