The nation continues to flirt with recession, hammered by problems in the financial services sector, but buoyed by Federal Reserve actions to stimulate lending and buttress troubled financial institutions. Strong exports are also significantly supporting the national economy, and that trend helps many Washington companies. Most regions across the state are continuing to grow based on exports of airplanes, software, and agricultural commodities and food products. However, in April two urban areas reported year over year job declines, the first regional declines seen so far in this recessionary environment. The preliminary employment report for April shows a decline of -0.1 percent in the Bremerton-Silverdale area, and a decline of -0.2 percent in the Spokane area. While these job losses are very small, they could be a harbinger of a spreading effect of the recession. Just as recessionary effects tend to spread from one industry to another, recessions can spread from one region to another. For now, the problems viewed by industry are confined to natural resources and wood products, supply industries feeding lumber products into the troubled residential construction industry nationally, and the financial services industry, which is struggling to stem losses and find a recovery path to a healthier mortgage sector. And on a regional basis, the declines in Bremerton and Spokane are accompanied by very low growth rates in Tacoma and Vancouver. In the months ahead, watch for signs that these industry and regional weaknesses are either spreading, indicating a deeper recession, or disappearing and thereby heralding the recovery that, it is hoped, will be evident by the fall.

Paul Sommers is a professor at the Institute of Public Service and Albers School of Business at Seattle University.