Spending in state rose 10.5 percent in spring

Those were the days, back in the spring when the flowers bloomed and the housing market sizzled.

Washingtonians had such confidence last spring that they spent with abandon on computers, hotel rooms, jewelry and other items.

They spent 10.5 percent more than they had a year earlier, the largest increase for taxable retail sales in Washington since 1990, according to April-to-June data released Monday by the state Department of Revenue.

Rising gas prices didn't wreck the mood and are not included in the retail-sales data.

Economists say the spending has calmed since then, doused by a slowdown in the housing market and slower employment growth.

But Washington remains stronger economically than the national economy, as the state rebounds after an especially hard time during the last recession.

"We suffered more during the latest recession. ... Because we declined a lot more, we're coming back quite strong," said Chang Mook Sohn, the state's chief economist.

The state's economic growth and therefore the spending are propelled by employment gains, particularly in high-wage sectors such as aerospace, software and construction, Sohn said.

Michael Parks, an economy watcher who publishes Marple's Pacific Northwest Letter, said Boeing's fortunes continue to be a harbinger for the state's economy, and right now the airplane maker is in clover.

"Aerospace tends to account for a great deal of the ups and downs of the Washington economy, even though it has fallen to a relatively small part of the economy," Parks said.

The springtime spending binge included a 30.2 percent increase in computer and software sales and a host of expenditures driven in part by baby boomers: a 12.8 percent increase in sales of building materials and garden equipment, an 11.7 percent rise in RV, boat and motorcycle sales, and a 10.2 percent rise in jewelry and luggage sales.

Sales of accommodations — mostly hotel and motel rooms — grew 13.1 percent.

"People in their 50s all of a sudden don't need bigger houses anymore, so they go on trips and they garden at higher levels," said Mary Ann Odegaard, director of retail management at the University of Washington's business school.

The spending also reflects new values.

Traditionally, Washington was not a state with much conspicuous consumption, Odegaard said. "Some of the new money behaves very differently."

Of the $27.6 billion in statewide taxable retail sales, the largest amount was spent in King County, where sales rose 11 percent from last year to $10.8 billion. Snohomish County saw a 15.3 percent increase to $2.7 billion, and Pierce County was up 9.8 percent to $3 billion.

Economists predict that spending slowed in the third quarter, which ended in September. Some were surprised it was so high last spring.

"I am puzzled at the strength a little bit, because we have had pretty high gasoline prices," said Evelina Tainer, chief economist for the state's Employment Security Department. "[Consumers] obviously didn't find them onerous."

Melissa Allison: 206-464-3312 or mallison@seattletimes.com