Professor Duy released the U of O Index of Economic Indicators for February this week.
The University of Oregon Index of Economic Indicators™ fell 0.9 percentage points in February to 85.6 (1997=100), signaling continued deterioration in the Oregon economy. Similar to recent months, a wide array of indicators worsened; in February, five of the seven components deteriorated.
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.
Weakness was pervasive throughout the Oregon labor market. Initial jobless claims rose in February, holding in a range consistent with substantial declines in nonfarm payrolls. Likewise, payrolls at employment services firms (largely temporary help
agencies) fell during the month, reversing a slight uptick in January. Total nonfarm payrolls (not included in the UO Index) fell by 21,700 in February, bringing the two-month total job loss to 34,700. The unemployment rate climbed to 10.8 percent, third highest in the nation.
On housing starts
Residential housing permits (smoothed) fell in February, edging down to the bottom of the roughly 900–1,000 range it has been tracking for the past seven months. It remains premature, however, to declare that housing activity has bottomed. Moreover, a bottom in new housing does not signal a bottom in existing home prices, as builders are likely to move more aggressively on pricing compared to homeowners.
Professor Duy is also predicting another bad jobs report in March when unemployment numbers are released next week.