Tuesday, February 10, 2009

U of O index: job losses will increase significantly in the first half of 2009.

Professor Duy released the U of O Index of Economic Indicators for December last week.

The University of Oregon Index of Economic Indicators™ continued its slide in December, falling 2 percent to 87.7 (1997=100). Compared to six months ago, the UO Index is down 10.8 percent (annualized). Weakness was widespread; six of the seven components of the index deteriorated.
The remaining indicator, U.S. consumerconfidence, was effectively unchanged.

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 market:
Oregon labor markets deteriorated in December. Initial jobless claims climbed even higher to a weekly average of more than 15,000 claims per month. Payrolls at employment services firms (largely temporary-help agencies) continued to fall and are now down 15.4 percent compared to year-ago levels. Total nonfarm payrolls (not included in the O Index) fell by 9,700 jobs in December.
Cumulative job loss since the February 2008 peak stands at 46,700; job losses will increase significantly in the first half of 2009.

On housing starts:

Residential housing permits fell in December to below 900, breaking a period of relative stability. Like much of the nation, housing markets are under stress as expectations of future price declines and tighter underwriting conditions outweigh the positive factor of lower interest rates.

I wonder how continued job losses figured into Conerly's imminent recovery.