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Consensus Economic Forecasting Commission, Apr. 2013
March 29, 2013
The Office of Policy and Management provides staff support for the Consensus Economic Forecasting Commission (CEFC), an independent group of economists who forecast Maine's economy. The Commission convened on March 26, 2013, to revise its November 2012 forecast.
National and state economic indicators suggest a continued lack of improvement in economic conditions since the CEFC met in October 2012.
While Congress and the president succeeded in coming to agreement on many of the “fiscal cliff” issues, the automatic spending cuts known as “budget sequestration” took effect as originally scheduled on March 1, 2013. The CEFC assumes that, while some of the economic effects of these spending cuts will certainly be felt in Maine, Congress and the president will reach a solution that prevents extensive deterioration of economic conditions. Given the negative impact to the economy if a solution is not successfully reached, the CEFC will reevaluate their forecast in the third quarter of calendar year 2013 in response to actual policy decisions at the federal level.
Actual wage and salary employment data for 2011 and 2012 were stronger than previously forecasted, resulting in higher growth rates for those two years. The 2013-2017 employment forecast was left unchanged. Personal income growth was revised downwards for 2012 following the release of actual estimates from the U.S. Bureau of Economic Analysis. Personal income was also revised down for 2013 in part to reflect a partial shift in bonuses and dividends from 2013 to 2012 to take advantage of lower tax rates. 2014 and 2017 were revised upwards while 2016 was revised slightly downwards and 2015 was left unchanged. Inflation, as measured by the Consumer Price Index (CPI), was revised upwards for 2012 and 2013 and slightly downwards for 2014-2017.
The Consensus Economic Forecasting Commission convened on March 26, 2013, to revise its November 2012 forecast.