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Washington's lead economist says state is poised to recover faster than others
His message is one of optimism.
Washington’s chief economist Arun Raha said last week that the economy is recovering and that we’re better positioned than most states at the Port Orchard Chamber of Commerce meeting at McCormick Woods Golf Course.
He said Washington is in a position to recover more quickly than most because of its high volume of exports.
Raha said some of that is tied to aerospace, which is thriving.
Boeing also has the Air Force’s tanker contract, which would create or save an estimate 11,000 jobs in the state.
“Because of exports, we will outperform the nation,” said Raha, adding that exports were up 28 percent in the fourth quarter.
He also cited job growth nationally in five of the last six months in addition to strong bond and equity markets behind his optimism.
On May 19, 2009, Dow Jones closed at 8,474.85.
It closed at 10,625.83 on Monday.
“These people are betting on a recovery,” said Raha, noting that consumer spending also increased in April.
That doesn’t mean this time is easy.
Unemployment rates still are higher than 9 percent, but Raha said that is not unusual in a recovery as businesses want to see sustained growth before hiring more employees.
“You can never have a recovery that is smooth,” he said. “There are bumps along the way.”
Some point to the number of unemployed growing at a faster rate than hires as problematic, but Raha said that is normal.
He said that some people simply give up looking for work during a tough economy, and when their unemployment benefits run out, they no longer are counted as unemployed because they are not actively seeking jobs.
Raha said many of those people now are seeking work again.
The Conference Board, a New York-based business research group, said its Consumer Confidence Index hit a record low in 2008. Raha said while those numbers remain low, he is undaunted.
He said research indicates that 76 percent of consumer confidence is related to gas prices.
One area where Raha remains less confident is home sales.
“Real estate still is down in the dumps,” he said.
Raha said that might not change until 2012, particularly since the tax credit for first-time homeowners has expired.
He said that many people are renovating their houses instead of following the traditional route of buying larger homes as their families grow, and young adults are opting to move back in with their parents.
There always is a risk that the economy falls back into a recession — Raha puts that likelihood at 10 percent — but he believes the worst has passed.
“Two thousand eight was a special event,” he said. “The likelihood of it happening is very slim. The stock market had a 50 percent reduction. The last time that happened was 1931.”