ECONOMIC PULSE
An update on the local and national economy
Posted April 2007
Money, money, money … how will we spend that income tax refund?
People questioned early in the year say they'll invest or save or pay bills with their refunds. By the time the money comes, some decide to splurge instead.
Various national companies poll taxpayers every year, trying to find out how they'll spend the money. The results vary considerably depending on the way the questions are asked and when they are asked.
BIGresearch conducted a national online survey of 9,027 adults in early February and found that many people earmark some of their refund for savings and investment and part for everyday expenses, a major purchase or a vacation. In the western United States, respondents said they plan to spend their refunds like this:
NOTE: This adds to more than 100% because respondents could choose more than one way to spend the money.
If everyday and splurge spending amount to 30 percent of refunds, that could mean more than $900 million spent in the four-county Puget Sound region this spring. If locals spend more than they anticipate, say 40 percent of their refunds, the total jumps to $1.2 billion.
Booking vacations? Tax refunds could boost spending in this category by $300 million or more.
Interested in finance? Paying down debt could total $1 billion or more. Savings could total $900 million.
Thirteen percent of taxpayers said they "plan to take advantage of" refund anticipation loans, according to a 2006 poll by TransUnion's TrueCredit.com, which that company discourages because of the high interest rates on this type of loan.
NOTE: Our method for estimating that $3.1 billion in federal income tax refunds will come back to the Puget Sound region is to multiply total federal refunds to Washington residents in 2005 (the most recent number available) by 65 percent, which is the percentage of total personal income in Washington that is earned by residents of King, Snohomish, Pierce and Kitsap counties.
Sources: IRS Data Book Fiscal 2005 and BIGresearch, CIA February 2007. The BIGresearch online poll is not a scientific sample, but it provides a useful snapshot of people's intentions as reported by the National Retail Federation February 22, 2007; GfK Roper Public Affairs & Media for TransUnion TrueCredit.com February 2006.
SEATTLE AREA ECONOMIC TRENDS
| U.S. ECONOMIC INDICATORS | Q2-07* |
Q1-07* |
Q2-06 |
|
| U.S. GDP (billions) | $11,647.4 |
$11,574.3 |
$11,388.1 |
|
| Annual Growth % Change | 2.5% |
2.3% |
2.5% |
|
| Inflation (CPI) U.S. | 2.047 |
2.034 |
2.017 |
|
| PUGET SOUND ECONOMIC INDICATORS | Q2-07* |
Q1-07* |
Q2-06 |
|
| Inflation (CPI) (Seattle-Bellevue-Everett) | 2.124 |
2.110 |
2.078 |
|
| EMPLOYMENT | 1,824,400 |
1,813,600 |
1,777,000 |
|
| - Government | 283,800 |
282,700 |
281,800 |
|
| - Wholesale & Retail Trade | 277,400 |
276,600 |
272,600 |
|
| - Professional & Business Services | 244,700 |
242,300 |
234,700 |
|
| - Information ( incl. Software Publishers) | 89,600 |
88,800 |
84,000 |
|
| - Aerospace | 76,000 |
74,600 |
70,600 |
|
| Unemployment Rate (Seattle-Tacoma-Bellevue) |
4.6% |
4.5% |
4.5% |
|
 Housing Permits |
25,800 |
24,600 |
30,200 |
|
| Home & Condo Sales | 74,100 |
71,800 |
76,100 |
|
| Average Home Price | $409,000 |
$410,400 |
$390,200 |
|
| U.S. 30-Year Mortgage Rates | 6.4% |
6.4% |
6.6% |
|
 TAXABLE RETAIL SALES(King, Pierce, Snohomish and Kitsap counties)($ thousands) |
Q2-07* |
Q1-07* |
Q2-06 |
|
| Total Taxable Retail Sales | $74,336,000 |
$73,030,000 |
$70,274,000 |
|
| Goods: | |
|
|
|
| - Motor Vehicles & Parts | $13,970,000 |
$13,789,000 |
$13,329,000 |
|
| - General Merchandise | $7,463,000 |
$7,346,000 |
$6,987,000 |
|
| - Food & Beverage | $7,422,000 |
$7,334,000 |
$7,060,000 |
|
| - Gasoline Stations | $5,459,000 |
$5,352,000 |
$5,003,000 |
|
| - Building Materials & Garden Supplies | $4,718,000 |
$4,598,000 |
$4,555,000 |
|
| - Furniture & Electronics | $3,454,000 |
$3,379,000 |
$3,269,000 |
|
| - Clothing & Accessories | $3,005,000 |
$2,958,000 |
$2,830,000 |
|
| Services: | |
|
|
|
| - Food Services & Drinking Establishments | $5,760,000 |
$5,677,000 |
$5,405,000 |
|
Note date change |
Feb-07 |
Jan-07 |
Feb-06 |
|
 Airport Passengers (Sea-Tac) |
1,984,286 |
2,079,715 |
1,989,763 |
|
Bases: King, Kitsap, Pierce and Snohomish counties. Sources and Data Notes: Unless otherwise noted, source is Copyright 2006 Conway Pedersen Economics, Inc., Seattle, WA “The Puget Sound Economic Forecaster”" March 2007
* Projected
Housing permits are for residential, privately owned units. Taxable Retail Sales - only major categories listed. Sea-Tac International Airport Traffic and Operations Summary