Thursday, April 30, 2009

Bad new for revenue forecast?

The Commerce Department announced on Tuesday that Gross Domestic Product fell by 6.1% in the first quarter of this year. This is a full percentage point behind the state forecast which pegged the decline at 5.1%. On top of this is the swine flu pandemic which seems to be picking up steam and has been rated as a level 5 by the WHO. Washington is the most trade dependent state and Mexico is our #3 trading partner.

While there is reason to believe the forecast could get worse there is till reason to believe that things could pick up. The Michigan Consumer Sentiment Index rose last month to 65, up from 55 in November. Consumer spending was also up as well. What has been dragging the economy down has been business investment. My guess, hitting bottom in the second quarter, slow recovery beginning in the third.

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