A new forecast for the state's economy doesn't include much good news. But the bad news isn't earth-shattering either.
The marginal impact of the stimulus package will wear off as consumer spending will slow, according to the September economic forecast from the state Economic and Revenue Forecast Council.
The predictions follow the same pattern as previous reports, senior economic forecaster Eric Swenson said.

The report's conclusions on the second quarter included:

The biggest changes predicted are housing permits, which will fall 42.5 percent. Also, construction employment is down by 4.2 percent and the drop will continue.

Other predictions include:

The Governor's Council of Economic Advisors will review the forecast on Friday. The full report is available here.

Their leadership has recommended they strike, but Boeing hopes that some 25,000 union machinists will approve the company's "best and final offer" Wednesday for a new 3-year-contract.

The company was holding in-plant meetings today to explain its latest offer and planned to provide buses to take its Machinist Union workers to the polls Wednesday.

"This is a whole new tactic on Boeing's part," said Machinists Union spokeswoman Connie Kelliher. "I think they want one more chance to preach the company line."

Boeing contends its offer is generous and will put Boeing workers at the top of the industry in wages and benefits.

The company offer provides for:

* General wage increases of 11 percent over three years.
* Cost-of-living adjustments that could add three percent more to worker wages.
* A lump sum payment of six percent of wages or $2,500, whichever is greater, if the contract is approved Wednesday.
* A pension increase to $80 per month per year of service.

The company company also withdrew its earlier proposals that would have changed the company pension plan to a defined contribution plan for new hires and that would have eliminated early retiree medical insurance.

The new package would provide Boeing workers with $34,000 in additional pay over the three-year contract term, Boeing said.

Boeing workers will mark two ballots Wednesday, one on approving the contract and one on sanctioning a strike.

Under the terms of the union's by-laws, Boeing could avoid a strike beginning at midnight in two ways.

Boeing could win contract approval by a majority vote of union workers or it could dodge a strike if fewer than two-thirds of union workers vote for a strike.

Boeing avoided a strike in 2002 when a majority of union members voted to reject the contract proposal but fewer than two-thirds voted to approve the strike. Without the strike weapon, the union was forced to accept the contract.

The union has said it wants a better deal than Boeing is offering because the company is riding a wave of high profits and record order backlogs.

The polls at five union halls in the Puget Sound area will be open from 5 a.m. to 6 p.m. Wednesday. Votes will be counted at the union's Seattle headquarters. Results are expected to be announced about 8:30 p.m. Some 1,500 workers in Portland and 750 in Wichita will also vote.

If a strike is approved, pickets will go up at Boeing plants at 12:01 a.m. Thursday. A strike is expected to shut down all work at Boeing's plants in Everett, Renton, Auburn and Frederickson.

Some analysts believe a strike could cost Boeing up to $120 million a day in revenue and delay the debut of its 787 Dreamliner now anticipated in November.

Washington has a new chief economist.

Arun Raha, who was the vice president for economic research and consulting for risk management firm Swiss Re, is the new executive director of the state Economic and Revenue Forecast Council, the state announced today.

"We couldn't have made a better choice," said state Rep. Jim McIntire, D-Seattle, who chairs the sate forecast council. "Dr. Raha's strong track record and his expertise in global economics and forecasting are a great fit for this very important position, especially at this turbulent time."

Raha replaces ChangMook Sohn, who stepped down in March to run for state treasurer.

Raha has a doctorate in economics from Washington State University and was a faculty member at Boise State University, where he forecast Idaho State General Fund Revenues for the state legislature.

Prior to working at Swiss Re, Raha also managed economic analysis at the Eaton Corpration, where he served on the Ohio Governor's Council of Economic Advisors. He is also a former trustee of the Automotive Markest Research Council and is on the Wall Street Journal's Economic Forecasting Panel.

"I am excited that we were able to find someone of Arun's caliber. He exemplifies the kind of integrity and objectivity vital to this position," said Victor Moore, a member of the Forecast Council and director of the state Office of Financial Management.

SeaTac's Alaska Airlines has told its pilots union it could furlough up to 165 pilots later this fall as it shrinks its schedule to fit economic realities.

The airline said it won't know how many pilots will be forced to give up their jobs until it finds out how many will accept one of three voluntary layoff or retirement offers.

The airline is offering present pilots one or two year leaves of absence or early retirement.

The airline said it is still tinkering with new schedules beginning in November to weed out unprofitable flights.

Alaska spokesman Paul McElroy said the airline hasn't made final those schedule adjustments, but he expects the new schedule won't cut out any destinations. The airline is more likely, he said, to eliminate some overnight "red-eye" flights and some weekend flying.

Alaska earlier had said it plans to reduce its flying by about five percent in the last quarter and in all of 2009.

Even so, the airline has added new flights to Hawaii and to Minneapolis-St. Paul.

The motivation behind the schedule reductions is the high cost of fuel which is eliminating profits throughout the airline industry.

Boeing is pinning its hopes for keeping the last aircraft assembly line in California open for another decade on a highly modified version of its C-17 transport.

The C-17, a four-engine, high wing plane that's stationed at Pierce County's McChord Air Force Base among others, is the workhorse of Air Force transportation moving troops and supplies around the world.

The Los Angeles Times sums up the new proposal in a story published this weekend. Here are a few excerpts. For the full story, go to www.latimes.com/business/la-fi-plane30-2008aug30,0,1071403.story.

Southern California's last major airplane factory, slated to close in two years, could find new life under a bold plan being floated by Boeing Co. to build a new version of the massive C-17 military cargo plane.

The proposal, gaining traction among Pentagon planners, calls for transforming the long-haul, strategic transport into a tactical aircraft that could deliver equipment and supplies directly to the battlefield.

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EgyptAir and Turkey's Pegasus Airlines are buying 15 new jetliners from Boeing in transactions announced today.

EgyptAir has ordered two Boeing 777-300ER long-range twin-engine jets worth $529 million at book prices.

The airline is to receive the first of the new planes in 2010, Boeing said.

Meanwhile, Pegasus Airlines, a low-cost airline in Turkey, announced it will double a previous order for Boeing 737-800 jetliners. The airline had ordered 12 of the twin-engine, mid-range jets from Boeing in 2005. It now says it wants to buy 12 more.

The two dozen new planes will make Pegasus the biggest private airline Boeing customer in Turkey.

This just in from New York: As clothing retailer Steve & Barry's emerges from bankruptcy, it'll shrink from 276 to 170 stores.

One of the casualties? The Olympia store at Westfield Capital Mall, according to a Steve & Barry's spokeswoman.

If you need your Steve & Barry's fix – Have you seen Sarah Jessica Parker's BITTEN line? – the stores at the SuperMall in Auburn and the Everett Mall will continue to operate.

Steve & Barry's was recently purchased out of bankruptcy by BH S&B Holdings, a newly formed affiliate of investment firms Bay Harbour Management and York Capital Management for $163 million.

The smaller base of stores should help the company reach its profitability goals, said Rachel Brenner, senior manager of public relations.

With the U.S. Open slated to arrive in University Place in a few years, it's not surprising that businesses are beginning to gear up their brands.

Take Gay Landry, for instance.

She's the owner of Affairs – the truffle palace, bakery and lunch spot at 2811 Bridgeport Way W.

That's her with what she calls "The Hole in One" or "The Official Brownie of the 2015 U.S. Open." It's a brownie, as you might expect, with a white chocolate "golf ball" in the middle.

Price: $2.50. Calories: Par 4.

Word comes from television stations in Portland that a worldwide raspberry shortage has forced our favorite brews brothers, Mike and Brian McMenamin, to stop brewing their famous Ruby Red beer temporarily.

Blame it partly on the Northwest's poor harvest this year too.

"The number one raspberry producing country in the world is Serbia," McMenamins brewery manager Rob Vallance told KATU-TV. "And they had a horrible, horrible crop as well."

Because of an abundance of Northwest raspberries in 1985, the McMenamins chose it as the base for their first fruit-flavored beer. They became the first brewers in the U.S. to legally use fruit in beer, according to their Web site. (I'm not sure who used them illegally first.) They squish up 42 pounds of raspberries to make enough puree flavor and color for each vat.

But without the raspberries, the McMenamins had to turn to an old standby berry first developed in the 1930s for Knott's Berry Farm in Buena Park, Calif.

Purple Haze flows from the tap at a McMenamin's pub. The new brew, made from boysenberries, has proven so popular, it'll stick around even after Ruby Red returns. (Photo courtesy McMenamins)

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