The annual Pierce County Economic Index is forecast to log its eleventh consecutive year of growth in 2020. A surge in the labor force and a steady unemployment rate have combined to increase both real total personal income and real personal income per capita. A further contributing factor is a likely decrease in the number of workers who are employed only part-time for economic reasons, which has continued to see declines at the state level.
With the BEA data revisions mentioned previously – particularly those made to the 1985 data – attention shouldn’t be on the level of the PCEI, but on the annual change. Last year’s 2019 Horizons Economic Forecast estimated the PCEI would have annual gains of 3.0 percent in 2018 and 2.3 percent in 2019. The revised estimate for this report puts the 2018 gains higher, at 3.9 percent, with the growth estimate for 2019 revised upwards to 3.2 percent.
Looking forward, the PCEI is forecast to rise 2.0 percent in 2020, ending the year at 251.0. The forecast is based on an estimated 3.2 percent increase in real total personal income and a 1.2 percent increase in real personal income per capita.
The 2018 PCEI was 0.5 percent above its long-term trend line of 2.54 percent annualized growth. This is the first time since 2008 that it has been above the trend line and represents a substantial improvement since 2013, when it was 6.1 percent below the trend line. The forecast growth for 2019 and 2020 should keep the PCEI slightly above the trend line.
COMPARATIVE COUNTY ANALYSIS
The PCEI methodology can be applied to income data for other counties, states, or the nation to generate annual economic indices for comparative purposes. While these indices aren't forecasted forward, as they are for Pierce County, they do allow for growth comparisons. While any county in the U.S. can be evaluated, the comparison here is limited to King, Lewis, Snohomish, and Thurston Counties.
King County has had the largest gains since 2014, with annualized gains of 5.2 percent. This is followed by Snohomish County, with 4.1 percent growth, and Pierce County with 3.9 percent growth. Thurston and Lewis Counties lag, with growth averages of 3.7 and 3.5 percent, respectively. The driver behind King County’s economic index gains is a 4.3 percent annualized gain in real per capita income. In contrast, Snohomish County had 3.3 percent gains, followed by Pierce County, with 3.0 percent gains, and Thurston and Lewis Counties, each with 2.7 percent gains. In terms of levels, Pierce County’s real personal income per capita edged ahead of Thurston County’s per capita income in 2017 and reached $52,100 in 2018. King County’s per capita income was $90,400 in 2018, more than twice that of Lewis County, and substantially above Snohomish County’s per capita income of $55,900.