Professor Duy released the U of O Index of Economic Indicators for November last week.The University of Oregon Index of Economic Indicators™ fell again in November to 89.6 (1997=100), a 0.5 percent decline from the previous month. Compared to six months ago, the UO Index is down 7.9 percent (annualized). Deteriorating labor market conditions, as measured by initial jobless claims and payrolls at employment service agencies, drove index weakness during November. Remaining indicators were either unchanged or improved slightly. Overall, the UO Index indicates that Oregon remains in recession.
As a general rule of thumb, a decline of 2.5 percent (annualized) over six months, coupled with a decline in more than half of its components, signals that a recession is likely imminent.
On the job marketThe recession continues to weigh heavily on Oregon labor markets. Initial jobless claims spiked higher in November to a weekly average of almost 14,000, well above the peak of 10,245 reached during the 2001 recession. Payrolls at employment services firms (largely temporary help agencies) fell for the fourth consecutive month and are down 8.6 percent compared to year-ago levels. Total nonfarm payrolls (not included in the UO Index) indicate that firms shed 6,300 employees in November and 34,900 employees since February of 2008. The Oregon unemployment rate climbed to 8.1 percent, the highest since September 2003. The depth of the downturn in the Oregon labor market will almost certainly exceed that of the 2001 recession.On housing starts and capital spending
For the fifth consecutive month, residential building permits (smoothed) remain near a monthly level of 1,000. Recent stabilization in this indicator is a hopeful sign that new residential construction activity has bottomed. Still, permit activity remains very low, housing markets deteriorated further in November, and there is little to indicate that an
upturn is near.
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