Arun Raha, the state’s chief economist, was as happy as a practitioner of the dismal science could be this spring. As he told a Washington Alliance Program last week sponsored by the International Council of Shopping Centers, the state’s “economy has been in recovery since last June.” Then came May.
“In May, the economic recovery hit a road bump,” he said. It was a bump not of our making — the Greek crisis and spreading concern about sovereign debt. But it rippled out into Washington state nonetheless. “Employers sat on their hands in May.” Indeed, the cash on hand at major corporations is at a record — money that might in other times gone into job-creating expansions and R&D. “The risks have changed,” Raha said. “We saw that private spending would not pick up.”
Raha remains convinced this will be a U-shaped recovery, but the U is longer. Among the other constraints, especially here: weak construction and the commercial real-estate woes; continued uncertainty facing banks, and tight credit for small businesses.
In commercial real estate: “Things are getting worse slower.” All this, along with continued high unemployment, keeps state tax coffers hurting. That maintains yet another drag on the economy: state government cutbacks and layoffs. He also spoke of upsides: Exports, the aerospace industry and renewed life in software development. As a result, “We will outpace the nation in the recovery.”
That’s a low bar, and the damage is still considerable here. We’re some 28 months after the start of the Great Recession. By this time after the 1981-82 downturn, all the lost jobs had been regained. Now we’re 150,000 jobs in the hole.
All of which means Raha, and the rest of us, will be hoping for better performance in June.
Today’s Econ Haiku:
Robert Byrd’s passing
Sad, historic, and maybe
The banksters profit
Comments | More in