ECONOMIC PULSE
An update on the local and national economy
Posted June 2004
The Puget Sound region's economy experiences some positive fluctuations
After three years of treading water, the U.S and Puget Sound region economies are starting to gain momentum. Nationally, the average number of jobless claims in the last four weeks fell to the lowest since November 2000, a sign that several forecasts predicting an economic expansion in the second half of 2004 are on target. In addition, the Conference Board revised its Leading Economic Indicator Index. The index is a gauge of the economy's performance in the next three to six months and has risen in 12 of the past 13 months. Another economist panel concurs; in April, the National Association of Business Economics (NABE), a panel of 31 professional forecasters, predict the U.S. economy will grow by 4.7 percent in 2004 - the fourth upward revision since the initial 2004 forecast was released. NABE also expects the unemployment rate to drop to an annual average of 5.5 percent in 2004 and 5.3 percent in 2005. Economists stated a terrorist attack, energy prices and a sharp increase in market interest rates are all potential risks to the continued economic growth.
Due to rising energy prices, which results in higher transportation and production costs, inflation is now a concern and many expect the Federal Reserve Bank to raise interest rates at the next meeting - but only slightly. Current and future economic growth is also tied directly to the rebound of business investment, which will drive GDP growth. The NABE panel forecasts a 9.8 percent increase in business-fixed investment and a 9.4 percent rise in exports.
The Puget Sound region, one of the hardest hit corners of the U.S. during the economic downturn, is relieved to finally experience employment growth, retail sales growth and a housing market that continues to remain strong. Preliminary employment numbers for fourth quarter 2003 show a slight increase, which may or may not stick, according to Doug Pederson of Conway Pederson Economics.
Puget Sound Economic Trends
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March-04 | April-04 | April-03 | |
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Rates | |||
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Inflation US % | 1.7 | 2.2 | 2.2 |
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Unemployment % | 5.8 | 5.9 | 7.1 |
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30-Year Mortgage | 5.59 | 5.96 | 5.92 |
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Indexes | |||
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Help Wanted | 56.6 | 58.6 | 59 |
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Numbers | |||
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Total Employment | 1,343,600 | 1,350,000 | 1,328,400 |
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— Professional & Business Services |
179,700 | 181,900 | 176,500 |
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— Retail | 143,000 | 143,500 | 139,500 |
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— Government | 207,100 | 207,200 | 204,300 |
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— Aircraft and Parts | 59,300 | 59,200 | 64,600 |
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New Car Sales | n/a | n/a | n/a |
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Homes Sold | 6,954 | 6,040 | |
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Home Prices (Median) | $236,755 | $218,000 | |
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Airport Passengers (SeaTac) | 2,291,420 | 2,269,484 | 2,026,635 |
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NOTE: Homes sold now reflects only King and Snohomish.
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Quarterly | Q2-02 | Q2-03 | % Change |
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Sales in Millions | |||
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Total Retail Trade | 5,173.3 | 5,428.8 | 4.94 |
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— Apparel/Accessories | 315.1 | 334.4 | 6.13 |
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— Auto Dealers (New/Used) | 942.1 | 1,056.7 | 12.16 |
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— Building Materials | 416.3 | 484.3 | 16.33 |
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— General Merchandise | 554.7 | 698.6 | 25.94 |
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— Home | 544.2 | 537.2 | -1.29 |
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— Restaurants | 777.2 | 837.6 | 7.77 |
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Services | 1,521.7 | 1,425 | -6.35 |
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— Hotels | 213.8 | 217.9 | 1.92 |
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— Personal | 74.9 | 76.9 | 2.67 |
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— Business | 535.8 | 479.8 | -10.45 |
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Base: Seattle-Bellevue-Everett PMSA includes King, Snohomish and Island counties.
Sources: Data compiled from various federal and state agency reports, including Washington State Employment Security Department.