FIFO or LIFO

I have been optimistic that this would be a LIFO recession. Washington was one of the last states to go into recession. It has been my belief that Washington would be one of the first states out and that over the next several years Washington would out perform the rest the nation as a whole by a comfortable margin. A U.S. map I saw today, however, has me wondering whether I’m right.

The state’s November Economic and Revenue Forecast summarizes the case for optimism:

We expect the Washington economy to recover sooner and stronger than the national economy. The synchronized global recovery now underway bodes well for the nation’s most trade dependent state. The state’s aerospace and software industries have fared relatively well during the recession and are likely to continue to do well once the expansion is under way. Despite continued setbacks to the 787 program, Boeing remains strong and has an extensive backlog of orders. The decision by Boeing to locate its second 787 line outside the state does not affect our forecast for the current biennium. Microsoft is also healthy with a strong balance sheet and growth opportunities. Although recent job cuts at Microsoft have made headlines, the overall number is very small and new hiring at the company has offset much of the loss.
Washington State Economic and Revenue Forecast, November 2009, Page 23

Here is the map, which compares across states changes in the Philadelphia Federal Reserve Bank’s coincident indexes of state economic activity over the last three months:

12.23.09 pic

 

Measured by three-month changes in the Phily Fed coincident index, Washington’s economy is the fourth weakest at the present time. Measured by one-month changes, Washington is second weakest.

The Phily Fed press release is available here; the underlying data, here.

Right now it’s looking FIFO.