The Washington Economic and Revenue Forecast Council was out Friday with its latest economic revue, and the news is mixed – which is better than bad.

Among the findings:

 • A second round of credit contraction is possible because of the vulnerability of local and regional banks around the country from their disproportionate exposure to commercial real estate. Credit to small businesses and retailers heading into the holiday season remains tight.

 • The forecast for fourth-quarter growth is 2.4 percent, which is lower than it was in the third quarter.

 • The asset quality of state-chartered banks has deteriorated faster than that of national banks. There is a risk, not insignificant, of a second round of credit contraction from local and regional bank failures.

 • Consumer confidence remains weak and is unlikely to improve until the job situation improves.

 • Because Washington’s economy is more trade-dependent than other states, it will outperform the national economy during the recovery.

 • Boeing’s recent announcement that its second 787 line will be located outside the state does not affect our current forecast for this biennium.

 • Boeing and Microsoft are likely to shed some more jobs in this region during the biennium – around 1,500 in aerospace and 200 to 300 in software publishing – significant, but not dramatic.

 • Employment in Washington is expected to bottom out early in the fourth quarter of this year with a peak-to-trough decline of 160,000 jobs. The Washington recovery, like the national recovery, will be slow and U-shaped.

 • Expect the unemployment rate to peak at 9.8 percent in the second quarter of 2010. Employment in residential building and related special trades will begin rising early next year. However, nonresidential construction employment will continue to decline well into 2011.

C.R. Roberts, The News Tribune