OLYMPIA – Washington’s battered economy likely won’t resume significant growth until next summer, a top state economist said Thursday.
Reporting to state lawmakers, Arun Raha painted a significantly bleaker picture than he did last month.
But Raha also said the current economic crisis is nowhere near the scale of the Great Depression. And he hinted at some signs that the economy is starting to bottom out.
First, the bad news: Raha said that weakness in housing and auto sales has now spread to other sectors, including other construction, manufacturing, aerospace, software and retailing. Household net worth has dropped 20 percent over the past year. Job losses continue, credit remains tight, and consumer confidence remains at record lows.
“Consumers are either not able or willing to spend,” he said.
Still, he added, some of the data indicates that Washington is nearing the low point of the recession.
“In the face of an economy that appears to be in free fall, it is easy to miss the early signs of a recovery,” he said.
He said that after a very weak holiday season, for example, retail sales seem to be stabilizing. Housing starts seem to have bottomed out. Used-car prices have firmed up. Some larger banks say they’ve been profitable in January and February. And investors seem to be returning to the stock market.
Raha said he expects to hit the lowest point of the recession in the third quarter of this year, with unemployment – hiring typically lags during a recovery – hitting a high of 10 percent in the second quarter of 2010.
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