Brace for another year of economic malaise.
Economists told some 700 people attending Greater Spokane Incorporated’s regional economic forecast Tuesday morning that this year has been worse than they initially anticipated and that next year holds little promise.
One in four young people are unemployed, house prices fell by more than 7 percent last year, employment growth is flat, and a dysfunctional Congress and a low-on-options Federal Reserve offer little encouragement.
Perhaps most surprising: the average Spokane household has the same purchasing power they did in 1996, said Grant Forsyth, economics professor at Eastern Washington University.
“To recover, people need to regain purchasing power,” he noted after his presentation. That won’t be easy as he forecast a 0.5 percent growth in household income as inflation grows at a faster, albeit anemic, rate.
Here are other numbers that Forsyth said underscored the region’s difficult path to recovery:
- Population growth is less than 1 percent
- Unemployment remains above 9 percent
- Employment growth is 0 percent
- Income growth is less than 1 percent
- Taxable sales, which help fund government services, grew by less than 1 percent
On the job front, Forsyth said Washington state has added 45,000 jobs – but two-thirds of those were in the Puget Sound region.
“That leads me to worry about a lopsided recovery,” he said, “especially in our rural areas.”
Smaller government, lowered entitlement payments from Social Security and Medicare, and the persistent struggles of logging and mining, leave rural communities vulnerable. He said that per capita, rural areas have more government employees, more retirees dependent on government payments, and fewer job opportunities than cities.