By Tim Duy,
Oregon Economic Forum
The University of Oregon Index of Economic Indicators™ fell 1.2 percent to 90.8 in April 2011, the first decline since October of last year. Declines were widespread throughout the components that comprise the index, with only the interest rate spread improving during the month.
Highlights of the report include:
– Initial unemployment rose sharply to their highest level since last October. A state benefit extension, however, drove the increase. As a consequence, the increase should not be view as a fresh weakening of economic activity, and should be largely reversed in May.
– Employment services payrolls – largely temporary employment – fell during the month, suggesting hiring activity is losing momentum.
– Core manufacturing orders slipped, with the trend over the last six months suggesting the pace of activity has slowed since the rapid gains experienced in the early recovery period. This may presage slowing growth in overall manufacturing activity.
– Consumer confidence (smoothed with a five month moving average) fell in April. Rising gasoline prices are squeezing household budgets, contributing to a slowdown in consumer spending growth.
– The sharp jump in commodity prices dragged down overall national growth in the first part of 2011. Recent price declines provide a welcome break in that trend, although the immediate relief is limited. Compared to six-months ago, the UO Index is up 4.3 percent (annualized), and almost all components have improved over that period. This suggests that Oregon’s recovery remains intact, although pace of improvement slowed compared to earlier this year.
Timothy A. Duy
Director, Oregon Economic Forum
Director, Undergradute Studies
Department of Economics
University of Oregon – 1285
Eugene, OR 97403-1285