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Greater Spokane Incorporated (GSI) will host its annual Economic Forecast on Tuesday from 7:30 a.m. - 9:30 a.m. at the Spokane Convention Center's Integra Telecom Ballroom.
The poet-prognosticator John W. Mitchell will be hand, as well as Dr. Grant Forsyth, professor of economics at Eastern Washington University. Both will lay out the roadmap for the next economic year.
Registration for the public is $50 at Events.greaterspokane.org.
The retail and total sales tax number for Spokane County, for the first quarter, came out and they're at least positive. But the full story is: this is not yet a normal economy.
Data show that Spokane say retail taxes up 2.7% and total sales up 2.1% compared to the first quarter one year ago. The number are actually from November through January 2011, but since the state holds back tax receipts for two months, the data is reported as “first quarter.”
Those numbers were cited in a regular Greater Spokane Incorporated email update. The person quoted by GSI on those numbers is Grant Forsyth, an Eastern Washington University economics professor.
Forsyth's take is that the spurt in sales in the traditionally soft first quarter comes from higher gas and fuel costs. It's not something we should celebrate too loudly.
“Until we see a return to regional income growth, taxable sales will be muted,” Forsyth said.
Real income growth is the challenge, as employers and small business operators keep a tight lid on costs. It's way too soon to see a rosy tint on the economic horizon, though some numbers are improving.
GSI's “Business Barometer” also cited comments by state Labor Economist Doug Tweedy, who said “The number of people employed in Spokane County has increased for three straight quarters. Everything is recovering slowly and we are not getting the bounce that usually comes after a recession. But the economy is generating jobs in the private sector, which is a positive for the future.”
The economic recovery will grind slowly forward next year, extending this year’s modest improvements but not breaking out strongly enough to significantly affect unemployment and household income, economists John Mitchell and Grant Forsyth said today.
Speaking at a Greater Spokane Incorporated forecast breakfast, Mitchell said businesses are delaying investment decisions because of uncertainty regarding future tax policy, health care reform and environmental regulation.
Paralysis on Capitol Hill has put the levers of economic stimulus in the hands of the Federal Reserve, which is keeping interest rates low and expanding the money supply in an effort to fuel more investment and consumer demand, he said.
Meanwhile, Mitchell said, consumers are repairing personal balance sheets by backing off on the use of credit.
Household wealth has plunged by $11 trillion since peaking in 2007 and housing prices, the foundation for much of that wealth, will continue to lose value in 2011, he predicted.
“This isn’t over,” said Mitchell, an independent consultant and former chief economist for US Bank.
Eastern Washington University Professor Grant Forsyth said he expects some job growth in Spokane and Kootenai counties, but unemployment will remain above eight percent.
Rates in neighboring counties will be higher, he said.
Forsyth said per capita income may increase slightly, but home prices will continue to fall by around four percent. Public projects are propping up commercial construction activity, he said, warning that sector is headed for a fall without more private-sector building.
Forsyth said rural counties are much more dependent on government jobs and transfer payments like Social Security and Medicare. If government austerity measures cut those benefits, the economies in outlying areas will be disproportionately affected, he said.