Concerns about the Seattle economy took center stage during a recent joint meeting of the Seattle City Council Select Committee on Federal Administration & Policy Change. Experts warned of a looming recession, with the likelihood of economic downturn in the next 12 months estimated at a staggering 40 to 50%.

The meeting highlighted the impact of tariffs on the regional economy, revealing a significant spike in effective tariff rates that has created uncertainty for businesses. While some tariffs are currently on pause, the overall economic outlook remains grim, with experts noting that the best-case scenario for tariffs offers little improvement over the baseline.

Employment figures in the Seattle Metro Area have also taken a hit, with a year-over-year decline of 0.3%. The construction and manufacturing sectors, particularly aerospace, have been notably affected, leading to layoffs and a weakened job market. Although there has been some growth in education, health services, and hospitality, the overall employment landscape is concerning.

Consumer spending in the Seattle area has dropped by about 4% compared to the previous year, contrasting with modest growth at the national level. This decline in consumer activity could have significant implications for sales tax revenue, further straining the local economy.

The tourism sector is facing challenges as well, with predictions of an 18% decline in overnight visits from Canada between 2024 and 2025. Experts anticipate that recovery will be slow, with pre-pandemic levels not expected to return until 2027.

As the city prepares for upcoming budget deliberations, officials are keenly aware of the economic headwinds facing Seattle. The discussions underscored the urgent need for strategic planning to navigate these turbulent times and mitigate potential impacts on the community.