The Washington Economic & Revenue Forecast Council's outlook is significantly weaker than it was during June. The economic recovery has "slowed to an agonizing crawl," according to the council's latest report.

The report says job growth remains anemic; housing is looking for a new bottom; and, despite some easing in credit conditions, small businesses continue to face a challenging credit environment. There is still considerable drag in the economy, little lift and increased uncertainty.

"The Washington recovery seems to have lost momentum in the summer months after strong growth in the spring," read the report. "In the two months for which data are available since the June forecast, June and July, the private sector has added more than 6,000 jobs which is better than the national rate but still a little weaker than our last forecast."

However, during the same period, state and local governments shed nearly 4,000 jobs, offsetting most of the private sector gains.

"Recent housing data are also disappointing," the report says. "After reaching a
post-recession high of 17,800 units in March 2010, single-family permits fell to 15,200 in April and 11,900 in May before partially recovering to 14,100 in June and 12,500 in July."

The report attributes the early strength mainly to the federal home-buyer tax credits, which it says had the effect of pulling significant activity forward in time.

Click here to read the full report.