Monday, August 11, 2008

Oregon Economy Improves In June

Professor Duy released the U of O Index of Economic Indicators for June this week.

The University of Oregon Index of Eco­nomic Indicators™ rose in June, gain­ing 0.4 percent to 101.01 (1997=100). Only one indicator, U.S. consumer confidence, deteriorated; remaining in­dicators either held stable or improved. Still, compared to six months ago, the index has declined 3.2 percent on an annualized basis, consistent with at least a mild recession.

As a general rule of thumb, a decline of 3.5 percent over six months, coupled with a decline in more than half of its components, signals that a recession is likely imminent.

On the job market:

On average, Oregon’s labor market im­proved in June following weak data in May. Notably, nonfarm payrolls rose 1,600, the first increase after three con­secutive declines. This improvement, however, followed a large downward revision of the May data, from an ini­tially reported job loss of 3,700 to a loss of 6,100. Growth in nonfarm payrolls stands at just 0.2 percent compared to June 2007, with a net job loss of 7,500 over the past four months. Initial un­employment claims continued to hold steady around the 8,000 mark, similar to levels reached at the beginning of the 2001 recession.

On Housing Starts:

Residential building permits gained for a second consecutive month, but remain 35.3 percent and 62.9 percent below June 2007 and June 2006 levels, respectively. While housing markets are expected to remain weak compared to the height­ened activity of recent years, permits have fluctuated around an average of 917 units over the past four months, suggest­ing stabilization, albeit at relatively low levels.