Timothy A. Duy
Director, Oregon Economic Forum
Department of Economics, University of Oregon
The Oregon Measure of Economic Activity fell to 0.41 in April, down from an upwardly-revised 0.74 in March. Highlights of this month’s report include:
– The moving average measure, which smooths out the volatility, slid to 0.55, still above average (“zero” indicates average growth over the 1990-present period).
– The manufacturing sector contributed negatively; the weakness was largely attributable to the manufacturing hours worked numbers. The hours worked data continues to run counter to the steady gains in manufacturing employment component.
– Building permits supported a solid positive contribution from the construction sector. Household sector components were generally strong; still, a negative contribution came from soft civilian labor force growth.
– The University of Oregon Index of Economic Indicators rose, gaining 0.5% in April. The recent rise in initial unemployment claims in February and March reversed in April; overall, claims remain at a low level consistent with continued job growth.
– Similarly, employment services firms, largely temporary help agencies, continue to expand employment. Building permits (smoothed) continue to edge higher while consumer confidence (smoothed) held steady.
– Core manufacturing orders were down a notch; increased trade tensions with China may cause business confidence to decline in the months ahead. If so, we would expect this number to soften. The interest rate spread has fallen to just 0.11 percentage points; in the past, a negative value has been a good recession indicator
The recent decline of the UO Index remains insufficient to raise imminent recession concerns. It’s behavior instead is consistent with a mature business cycle in which growth is relatively slower compared to early in the expansion. Indicators overall still suggest the Oregon economy is poised for continued growth.
Link to full report (with expanded charts!) here.