When it comes to the economy "sideways is good"

That's what Arun Raha had to say about certain trends indicating that we're nearing the end of the recession. Certain revenue streams such as the Real Estate Excise Tax are starting to move "sideways" instead of "due south" which Raha says is the first sign of recovery.

But that doesn't mean it's all good news. At today's meeting of the Economic Revenue and Forecast Council, Dr. Arun Raha shared his current analysis of the state's economy. He pointed out that there are mixed signals from the economy and acknowledged that the June forecast is weaker than his forecast from this past March. He said that consumer spending won't likely start to increase until the end of this year, and that will result in a lag on business investments, resulting in a "U-shaped recovery." Dr. Raha also predicted that unemployment numbers will continue to grow, though at a slower rate, and housing prices will continue to drop through 2010.

The bottom line: Without any action from the Governor or legislature, we're on track to be short $194.5 million by the end of the upcoming 2009-2011 biennium. That represents a pretty small number when compared to the size of the state budget and council members from the governor's office and legislature seem to think there's time to take administrative actions to address the shortfall.

Dr. Raha concluded his presentation by stressing that we'll have far more clarity about economic trends in September when the next forecast is due. "The crystal ball is not as foggy as it was in March, but it's still not entirely clear."

When asked by the Associated Press whether Democratic lawmakers see a need for a special session, Rep. Ross Hunter, who serves on the council, said that if the governor's office feels they can manage this without a special session, then he's comfortable with that. "It feels like we're hitting the bottom of the slope and I'm willing to wait a few months for more clarity on the numbers."

You can read all the details of Dr. Raha's presentation here.