Recent economic news has been characterized as tepid at best, but the most recent Washington State Department of Revenue report offers one of our clearest recent indicators that a solid economic recovery may be underway, at least in Washington State. The recently released Department of Revenue First Quarter Sales tax numbers show a statewide jump from the preceding 12 months (Quarter 1, 2012) of 8 percent.
The just-released June CPI numbers show that inflation continues to be low. The Seattle CPI-W index came in at 1.2% up 1/10 of a percentage from April but down from 2.7% from last June. The All-Cities index came in at 1.8%, up from 0.9 in April and slightly up from last June’s 1.6%. This graph shows the movement over the past year.
The just-released home sales data indicates some continued improvement in the local housing market. This is also a good sign of a broader recovery not only of the Seattle area economy, but possibly a statewide recovery. As we recently reported, the Washington State Economic and Revenue Forecast Council continues to indicate that the Washington State economy is recovering at a somewhat stronger rate than the national economy.
The March 2013 report of the Washington State Economic and Revenue Forecast Council identifies the continued mixed economic signals from both the National and State economy.
The Washington State Employment Security Department released its monthly employment report for February 2013 today, confirming that a recent trend in new jobs and a drop in the unemployment rate is no mirage, and may be gathering steam. The headline numbers indicate that the State, particularly the Seattle-Bellevue-Everett region, is seeing a strong rebound in new jobs.
The State Economic and Revenue Forecast Council released its updated March revenue report and forecast today, showing some improvements in the State’s budget for the current biennium. The revenue forecast for the current biennium has been increased by $58.8 million by the Council. This reports an improvement over the November 2012 forecast, based on an increase in likely tax collections during the current biennium.
The November national inflation number, as reported by the All Cities CPI-W dropped to 1.7%, a full half percent below the October report for the same Index (2.2%). The All Cities CPI-U was reported at 1.8%. (These indices report inflation as measured over 12 months). According to the Bureau of Labor Statistics report, the drop of inflation is almost entirely attributable to a decrease in gas and energy prices.
We often are asked, what the “Seattle” CPI is and whether it only covers the City of Seattle, or King County. In fact, the “Seattle” index covers the entire Seattle metropolitan area. There is no requirement that you be in, or near “Seattle” to rely upon the Seattle index. In fact, you do not need to be in the Metropolitan area covered by the index, to justify its use. Even Eastern Washington jurisdictions likely have comparables that depend on the Seattle index for inflation adjustments, so tying those contracts into the Seattle index is the surest way to ensure that they keep pace with their Western Washington comparables.
In our last inflation report, the August bimonthly Seattle-W CPI index was a full percentage point above the All Cities-W (2.7% versus 1.7%). However, the latest bimonthly CPI release shows a convergence of the two indices. The October Seattle W has dropped to 2.3% while the All Cities-W has risen to 2.2%:
