By Tim Duy,
Oregon Economic Forum
The UO Index rose 0.5 percent in July, and the overall behavior of the Index in recent months continues to indicate that Oregon will exit recession in the second half of 2009. Highlights include:
• Initial jobs claims continue to trend downward, but the slow pace of improvement is consistent with a jobless recovery, a situation in which even as the economy emerges from recession, economic growth is not sufficient to support significant net job creation. Note that the declines in nonfarm payrolls resumed in August as employers shed a net 6,600 workers.
• Residential building permits were essentially unchanged, albeit at very low levels of activity. Given reports of some stability in housing markets this summer both nationally and locally, the residential construction market may have reached a bottom this summer. Housing markets, however, are dependent on a wide range of government support that is likely to be curtailed in future markets and still the headwind of tighter underwriting on the part of lenders.
• New orders for core manufactured goods declined for a second month; while firm investment plans have stabilized, but lack the upward momentum consistent with strong growth.
– Consumer confidence gained, but remains fragile – note, for example, the repaid reversal in car sales in September after the Cash for Clunkers program expired.
• The UO Index is likely to be a coincident measure of activity at the end of the recession; it will rise as the Oregon economy exits the recession. Although a one month gain is not by itself conclusive evidence that the recession has ended, it follows a pattern of improvement in the UO Index in recent months that is similar to the improvement that signaled an end to the 2001 recession. The concern of an anemic recovery with subpar labor market conditions remains as the economy experiences structural adjustment away from the debt-fueled consumer dynamic of recent years.
LAST CHANCE TO REGISTER FOR THIS YEAR’S OREGON ECONOMIC FORUM IN PORTLAND!
We are pleased to announce the 6th annual Oregon Economic Forum: The Economy Under Obama: Assessing the First Nine Months, Looking Toward the Future.
October 22, 2009, Portland,OR
The Obama Administration came to office facing a financial market in shambles and an economy in crisis, a situation that required quick and decisive policy initiatives on fiscal stimulus and banking policy. Ten months later what has been the impact of those programs, for the nation and for Oregon? Did the Administration jumpstart economic activity, or are we looking at a prolonged period of economic weakness? And what is next on the agenda – in particular, what are the Administration’s plans for entitlement programs? Will Medicare and Social Security reform be on the agenda, and what shape would those reforms take?
REGISTRATION WILL SOON CLOSE!
For more information, visit http://econforum.uoregon.edu
Special thanks to KeyBank, presenting sponsor of the 2009 Oregon Economic Forum
Director, Oregon Economic Forum
Director, Undergraduate Advising
Department of Economics
University of Oregon – 1285
Eugene, OR 97403-1285