The state Economic and Revenue Forecast Council presented the preliminary version of its June economic forecast of the state economy today. A revised version of this economic forecast will form the basis for the ERFC’s June forecast of state revenues, which will be released on June 17.

ERFC Executive Director and Chief Economist Steve Lerch began his presentation with an especially important caution:

One of the points I would really like to make is the great degree of uncertainty right now associated with the path of the economy.

ERFC Chief Economist Steve Lerch

The national economic forecast that underlies ERFC’s state forecast shows real GDP falling at an annualized rate of -32.7 percent for the second quarter of this year, followed by annualized growth of 11.1 percent and 8.8 percent for the third and fourth quarters, respectively. Real GDP would not surpass the peak level achieved in the fourth quarter of 2019 until the second quarter of 2022.

ERFC’s preliminary state forecast has nonfarm employment in the state falling by 605,300 from the first quarter to the third quarter of 2020. Employment would not surpass the level of the first quarter of 2020 until the first quarter of 2023.

The following chart shows the new forecast of state employment compared to the one adopted in February. Interestingly, under the new forecast employment is higher in 2024 and 2025 than under the old. The biggest improvements are in the professional and business services sector and in the education and health services sector.

Handouts from the meeting are available here. TVW’s video of the meeting is available here.