State Economic Watch

Washington State businesses continue to be in a dour mood according to the results of the summer Washington Employers Survey from the Association of Washington Businesses.  According to the most recent quarterly survey, conducted July 8-22, 38% of the state’s businesses view the state’s economy as weak or very weak, compared to 26% in the summer 2025 survey. However, relocation plans are down slightly, with 16% of respondents considering relocating to another state, down from 24% in the spring 2026 survey, and the number of business leaders considering moving their personal residences out of Washington State fell to 45% from 55% in the spring. Similarly, 14% of respondents are considering expanding in Washington state compared to only 9% in the spring survey, while 33% plan to expand their businesses in another state compared to 38% in the spring. The survey respondents continue to cite taxes and government regulations as the principal challenges for businesses in the state. ...

Business conditions in the Texas services sector remained stable in July according to the latest Texas Services Sector Outlook Survey from the Federal Reserve Bank of Dallas. The top line revenue index held steady at 9.5 compared to the 9.8 posted for June. The employment index fell from 8.1 to 2.6, but the company outlook and general business activity indexes both increased modestly. The six-month forward expectations indexes were mixed, with the revenue index unchanged m/m and the employment indexes up slightly.  

Vermont state economists are projecting general fund revenue growth to 2.4% in the current year and 3.2% next year. This is equal to the forecast made in January, but better than the revenue downgrade that was anticipated. The economists point to, among other things, the knock-on wealth effects from rising equity prices and the resultant increases in consumption and tax receipts. 

The Detroit News reports that Michigan has sustained more than $4 billion in economic damage from the Canadian and northern Minnesota wildfires - and that’s only the direct economic costs. Included in this economic damage is the cancellation of the John Mellencamp concert at Pine Knob last Thursday.

  The Federal Reserve Bank of Philadelphia’s State Coincident Indexes were solid again in June, with the three-month diffusion index remaining at 84, equal to the reading in May, and only slightly lower than the 92 posted in April. The indexes increased in 46 states with only Connecticut, Kentucky, Hawaii and Alabama posting index declines over the three-month period. The indexes of Alabama and Kentucky have declined each month since March, while Connecticut’s index fell m/m in April, but has remained steady since then. Hawaii’s index hit it’s recent peak in April before declining modestly in May and June. Eleven states posted over 1.0% increases over the last three months, led by West Virginia and Delaware. The exhibit below is reproduced from the press release.

The Federal Reserve Bank of Kansas City’s July Services Survey reflects a modest increase in activity in the Tenth Federal Reserve District. The top line composite index increased to 14 in July from 5 in June. The general revenue/sales index also rose moderately to 19  from 3. Employee count ticked up minimally to 4 from 1 but the hours worked index declined from 8 in June to -1 in July. Part time employment fell from 8 to -5, but this index has been negative to barely positive for the last year. The six-month expectations indexes were generally flat m/m, with the composite and general revenue/sales indexes remaining in solidly positive territory at 24 and 39 respectively.