ECONOMIC PULSE
An update on the local and national economy
Posted February 2004
Business and consumer spending provide healthy 2004 outlook
The economic climate in 2004 is expected to be healthy, according to four economists discussing the international, national, regional and local economic pictures at the annual Seattle Economic Development Council Economic Forecast conference in January. Paul Kasriel, Sung Wohn Sohn, John Mitchell and Dick Conway each presented what factors will contribute to continued economic growth in 2004.
Paul Kasriel, director of economic research at Northern Trust bank commented that the weak dollar is playing a surprising role by increasing U.S. exports, which is contributing to the increase in U.S. manufacturing and production.
Although consumer spending will continue to play an important role, business spending will now take the lead. Due to corporate profits being at a two-year high, substantial tax cuts in 2003 and 2004, and stable interest rates, businesses are expected to build back inventories and increase capital expenditures. The recession caused many businesses to deplete inventories and as demand for goods and products rises, the need for an inventory has returned. As a result, employment is expected to increase - albeit slowly, according to Sung Won Sohn, executive vice president at Wells Fargo Bank.
Regionally, the surrounding areas of the Seattle, Portland and Boise metros are experiencing growth in their niche industries, John Mitchell, U.S. Bancorp economist said, contributing to a positive economic outlook for northwest states. It is important to look beyond the major metros for a pulse of the economy in some states.
Locally, the Puget Sound region's leading index increased 2.3 percent in third quarter 2003 indicating growth and an employment rebound. Dick Conway, of Dick Conway and Associates reported that for the first time since the boom of the 1980's, each of the seven composite indicators increased - painting a very encouraging economic outlook for Washington State in 2004.
Puget Sound Economic Trends
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Oct-03 | Nov-03 | Nov-02 | |
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Rates | |||
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Inflation US % | 2.0 | 1.73 | 2.15 |
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Unemployment % | 6.5 | 6.4 | 6.4 |
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30-Year Mortgage | 6.12 | 6.07 | 6.22 |
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Indexes | |||
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Help Wanted | n/a | n/a | n/a |
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Numbers | |||
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Total Employment | 1,341,000 | 1,347,700 | 1,360,300 |
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— Prof. & Business Services | 181,900 | 182,300 | n/a |
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— Retail | 142,800 | 146,800 | 234,600 |
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— Government | 201,500 | 207,500 | 206,700 |
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— Aircraft and Parts | 60,300 | 59,900 | 70,000 |
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New Car Sales | 7,239 | n/a | 8,211 |
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Homes Sold | 5,198 | 3,501 | 3,260 |
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Home Prices (Median) | $217,500 | $223,950 | $205,000 |
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Airport Passengers (SeaTac) | 2,113,661 | 2,022,110 | 1,892,822 |
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* NOTE: The Washington State Bureau of Labor Statistics uses NAICS as of January 2003 and therefore historical data will not be comparable in some line items.
** Homes sold now reflects only King and Snohomish.
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Quarterly | Q1-02 | Q1-03 | % Change |
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Sales in Millions | |||
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Total Retail Trade | 4717.3 | 4824.5 | 2.27 |
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— Apparel/Accessories | 253.4 | 271.7 | 7.22 |
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— Auto Dealers (New/Used) | 892.9 | 888.3 | -0.52 |
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— Building Materials | 301.0 | 357.0 | 18.60 |
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— General Merchandise | 507.9 | 619.9 | 22.05 |
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— Home | 547.5 | 565.6 | 3.31 |
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— Restaurants | 694.7 | 754.5 | 8.61 |
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Services | 1391.2 | 1383.4 | -0.56 |
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— Hotels | 168.4 | 168.4 | 0.00 |
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— Personal | 65.2 | 69.6 | 6.75 |
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— Business | 493.8 | 481.0 | -2.59 |
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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.