Director, Oregon Economic Forum
The UO Index fell slightly in May, down 0.1 percentage points. The relative stability over the past three months, however, is a welcome relief after many months of steady decline and is consistent with a recent pattern of economic stabilization, both state and nationwide. Highlights include:
• Initial jobless claims edged downward, but remain at high levels. Ongoing high levels of initial claims would be consistent with the “jobless recovery” scenario, in which economic growth is insufficient to generate net positive job growth.
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• Residential housing permits continue to decline, more evidence that the housing recovery – or even stabilization – remains elusive. High unemployment and tighter credit continue to weigh on the sector.
• New orders for core manufactured goods jumped, an indication that firms are no longer cutting investment spending. If this trend is sustained, it would feed through to stabilizing and eventually stronger manufacturing activity in Oregon in the months ahead.
• The pace of economic deterioration has slowed markedly, and while the Oregon economy likely remains in recession in May, the improvement in the 6 month annualized change in the UO Index is consistent with the recession (period of negative growth) ending in the second half of 2009. Without a clear upward turn in the UO Index itself, it would be premature, however, to decisively declare that the recession has ended.