The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.
There are many signs of Oregon’s cooling economy, from a flat job market to a slowdown in manufacturing.
One of the clearest signals comes from the University of Oregon Index of Economic Indicators, a monthly barometer calculated by Professor Tim Duy. It brings many separate data points together to give a holistic look at the state’s economy.
The idea, Duy explains, is to give an “up or down” reading on the economy. “A rising or flat index signals continues growth, a sufficient decline -- both depth and breadth -- signals recession.”
Drawing on manufacturing, housing, construction, jobs and other economic data, Duy creates a snapshot of how the state is doing at a given point in time. The index goes back more than two decades and sets a benchmark of 100 based on the state’s economic condition in 1997.
The barometer fell sharply during the Great Recession but rebounded just as fast and remained strong for the better part of a decade. In March of last year it reckoned Oregon’s economy was as strong as it had been at any point since 1996.
Things have been trending downward since, though, below what economists expect during an economic expansion. Three times this year the index has been below 100, reflecting worrisome signals in several parts of the data.
“The weakness in the measure stems largely from negative contributions from the manufacturing sector but also unusually soft numbers in the services sector,” Duy wrote in the most recent report, out last week. “The manufacturing sector remains under the weight of slower global growth and trade policy uncertainty while low job growth in Oregon drags down the employment-laden services measure into negative territory.”
The University of Oregon Index of Economic Indicators has been trending downward for more than a year but doesn’t necessarily signal an end to the state’s long economic expansion.
The state’s jobless rate remains near a historic low of 4.1%, according to the latest employment report out this past week. The Oregon Employment Department also revised past hiring figures, which now indicate job growth this year has been stronger than previously understood. Duy (like other Oregon economists) doesn’t see signals of an imminent recession.
“At this point, the combination of measures in this report suggests ongoing economic expansion,” he wrote, “albeit at a slower pace of growth compared to last year.”
— Mike Rogoway | twitter: @rogoway | 503-294-7699