On October 12, 2010 Arun Raha, chief economist for Washington state, presented his monthly “State of the State” Economic and Revenue Outlook for Washington. He reported on a myriad of leading and lagging macroeconomic indicators that gave some concrete details to the question that all of us are asking; is Washington in for a “W-shaped” recovery or “double dip” recession?
The answer, which is only 100% accurate by use of a time machine, can be fairly well predicted through data analysis. In Raha’s report, his analysis suggests similar trends for Washington as compared to the nation; “the economic recovery is going to be a slow and painful slog.” An optimist would sure be thankful to avoid another recessionary period of massive declines in consumer spending and tight credit markets for small businesses, but a deep trough is difficult to climb out of.
To view Arun Raha’s complete PowerPoint presentation, click here.
Yesterday, Umpqua Bank hosted Arun Raha, Michael Parks, editor emeritus Marple’s Letter, and Ray Davis, CEO of Umpqua Bank, for a follow-up presentation of the economic forecast of the state. They were concerned with particular matters, such as a potential trade war with China, the housing industry remaining soft and political gridlock. However, Boeing and Microsoft provide Washington’s own defense against a recovery on par with the nation. Parks believes that Boeing is continuing to show gratitude for the area, which will help the state benefit from the jobs that they provide as well as their massive presence as the aerospace industry’s most dominate player. Raha said Washington is at the trough of a U- shaped recession and is unlikely to see a “double dip.”
The Business Examiner summarized key points made during the Umpqua Bank presentation and can be found here.
Below is a graph of the percent change in GDP and real consumer spending:
Below is a graph of the net percentage of availability of loans: