The Economic and Revenue Forecast Council posted the Preliminary March Economic Forecast today. The summary memo from Arun Raha (ERFC Executive Director) to the Governor’s Council of Economic Advisors is here; calendar year tables are here; fiscal year tables are here.

With regards to the national economy Raha’s memo has this good news:

The near-term outlook for the U.S. economy is a little stronger than expected in the November forecast and this is reflected in the forecasts for employment and income as well as GDP.

Overall, growth employment in Washington state is on track with the November forecast:

The state’s job market has performed close to expectations since the November forecast was released. The private sector added 4,200 jobs in November and December. We had expected 4,100. The construction sector lost 2,200 jobs in the final two months of the year but manufacturing added 2,000 largely as a result of 1,700 new aerospace jobs.

The new forecast is for the state to add 58,900 jobs overall from the 4^th quarter of 2010 to the 4^th quarter of 2011. This is a 1,200 job improvement from the 57,700 job gain forecast in November.

With regards to state tax revenue, this good news on total employment is offset by bad news on construction employment. The November forecast foresaw 1,800 more construction jobs in 4^th quarter 2011 than in 4^th quarter 2010. Under the new forecast, the number of construction jobs in 4^th quarter 2011 is just equal to the number in 4^th quarter 2010.  Since the average construction job generates about twice the tax revenue that the average job elsewhere in the economy generates, from a revenue standpoint the 1,800 job loss in construction should roughly offset the 3,000 job gain elsewhere in the economy.