The state Economic Revenue and Forecast Council (ERFC) met yesterday morning to review a preliminary version of the economic forecast that it will use in preparing its next update of the state revenue forecast, which is scheduled to be released on November 18.

This preliminary economic forecast is a bit weaker that the economic forecast that was used for the September revenue forecast, with 39,400 fewer jobs in 2021 and 54,600 fewer jobs in 2022 under the new forecast compared to the old. Unemployment rates are correspondingly higher in the new forecast than in the old (7.1 percent vs. 6.6 percent for 2021, 5.9 percent vs. 5.2 percent for 2022). As a result of recently announced job cuts at Boeing, the forecast of aerospace employment is down by 6,900 in 2021 and 11,800 in 2022 compared to the September economic forecast.

The state economic forecast is based on a forecast of the national economy prepared in early October by the consultancy IHS Markit. This national forecast assumed that Congress would in October pass an economic stimulus package providing a $300/week emergency unemployment insurance benefit though the end of the year as well as a second round of federal stimulus checks. This did not happen. According to ERFC staff, elimination of the assumed stimulus package would reduce the forecast of 4th quarter personal income by 7 percent.

The final November economic forecast will use an updated national forecast from IHS Markit, which should be available next week. IHS Markit has delayed release of this forecast so that fiscal policy assumptions might reflect the results of the election. According to the Wall Street Journal, bond traders believe that there will be less stimulus spending because Republicans have retained control of the Senate.

The preliminary economic forecast is currently available here. Past economic forecasts are archived here.

The TVW video of yesterday’s ERFC meeting is available here. Discussion of the forecast begins at 15:40.