Latest Washington State Economic Forecast a Mixed Bag

Posted by Joe Adamack on September 29, 2026

On Friday, Washington budget and tax policy leaders received the latest economic and revenue forecast, which projects revenues over the next four years that lawmakers must use in crafting and adopting long-term state spending plans. The overall picture was mixed with some near-term downside risks and long-term upward reversions. Besides the baseline dollar figures most relevant to lawmakers, there are a number of assumptions shared by the state’s chief economist relevant to Washington credit unions. Notes and insights below:

• Washington state job growth has been stronger than projected last quarter despite downward reversions in previous forecasts, notably showing a 2,800 increase in manufacturing jobs, while education and health care gained 5,900 jobs.
  • While that means Washington’s unemployment rate has declined, the overall number remains higher than the national average which is by no means new for the state or region.
• Seattle area home prices continued declining for a total 2% reduction over the last year, departing from the national average that saw housing prices increase 2% over the same period.
• Car and truck sales have declined 15% over the last year with passenger cars down 13% and trucks down 25% (notably gas prices have also increased significantly over that same time).
• Housing construction has surged over the last quarter largely due to multi-family projects permitted.

These are just a few of the local factors that are combined with a broad range of other state, national, and international data used by state forecasters to project incoming state revenue. To read the full report click here — September 25, 2026 Revenue Review Meeting Materials.

Posted in Advocacy on the Move, Washington Advocacy.