During a typical forecast cycle, the Chief Economist and staff of the Forecast Council (ERFC) meet with the Forecast Work Group to discuss the preliminary U.S. and state economic forecasts.
ERFC produces preliminary economic forecasts for the U.S. and Washington. In September, he preliminary forecasts are then reviewed and discussed by the Governor’s Council of Economic Advisors (GCEA) in the presence of the Governor and members of the Economic and Revenue Forecast Council.
Once the final economic forecasts for the U.S. and the state are completed, work begins on the General Fund-State revenue forecast. The economic forecasts are completed first because data from the economic forecasts are used to produce the revenue forecasts.
- The final U.S. economic forecast is based on the November Global Insight and Blue Chip consensus forecasts. Global Insight continues to assume that the Federal Reserve will raise the federal funds rate in December. The rate change is expected to be an increase of 0.25%.
- Two key measures of consumer confidence both indicated less optimism in October. The University of Michigan (UM) index of consumer sentiment decreased by 4.0 points to 87.2. After two consecutive gains, the Conference Board index of consumer confidence decreased 4.9 points to 98.6 in October. The Conference Board survey noted more pessimistic consumer assessments regarding the labor market and business conditions, while the decrease in the UM index was attributed to less positive views on prospects for the economy despite optimism regarding personal finances.
- Our oil price forecast reflects the futures markets, primarily the Brent (North Sea) oil price but also the West Texas Intermediate (WTI) benchmark.