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~ w <br />.~. M ~~... ,~. <br />~: <br />forum <br /> <br />NOVEMBER 2005 <br />Author <br />Timothy A. Duy <br />Director, Oregon Economic Forum <br />Department of Economics <br />Research Assistant <br />Tanya Raterman <br />Economics Undergraduate. <br />Analysis <br />The University of Oregon Index of Econom- <br />ic Indicators~'M continued to gain in Novem- <br />ber, rising 0.5 percent to 106.6 (1996=100). <br />Four of the eight indicators that comprise <br />the UO Index-Oregon initial unemploy- <br />ment claims, Oregon residential building <br />permits, Oregon nonfarm payrolls, and U.S. <br />consumer confidence-improved in No- <br />vember. The remaining four indicators- <br />Oregon weight distance tax, The Oregonian <br />help-wanted ads, U.S. manufacturing or- <br />ders, and the interest rate spread-dete- <br />riorated. Improving indicators outweighed <br />those that deteriorated, however. <br />Two of the three Oregon labor market in- <br />dicators posted strong improvements. <br />Nonfarm payrolls gained 7,600 workers in <br />November, the largest increase since July. <br />On average, payrolls rose by 4,355 work- <br />ers each month from January through No- <br />vember. Moreover, initial unemployment <br />claims fell sharply to their lowest level in <br />the period covered by the index, January <br />Table 1: Summary Measures <br />1995 to present. These data indicate a <br />strong labor market in Oregon. <br />Remaining indicators were mixed. <br />Retreating gasoline prices supported <br />a gain in U.S. consumer confidence. <br />Rising building permits suggest that <br />the construction industry in Oregon <br />remains healthy despite the uptick in <br />mortgage rates this year. In contrast, the <br />Oregon weight distance tax collected <br />slipped from October's strong show- <br />ing. Likewise, orders for manufactured <br />goods in November failed to build upon <br />the previous month's gain. Continued <br />monetary tightening by the Federal Re- <br />serve contributed to a narrowing of the <br />interest rate spread. In the past, such <br />a narrowing has presaged weaker eco- <br />nomic activity. Recent policy statements <br />suggest that the pace of rate increases <br />will slow in the months ahead. <br />Compared to six months ago, the UO In- <br />dex rose 2.0 percent (annualized), while <br />the six-month diffusion index, a measure <br />of the proportion of components that are <br />rising, stood at 50 (in other words, half <br />the components improved). As a general <br />rule, a decline in the index of greater <br />than 2 percent over six months (annu- <br />alized), coupled with a decline in more <br />than half of its components, signals that <br />a recession is likely imminent. Conse- <br />quently, the index suggests that Oregon's <br />solid pace of economic growth is set to <br />continue for at least the near term (three <br />to six months). <br /> <br />Jun. <br />Jul. 2005 <br />Au . <br />Se <br />Oct. <br />Nov. <br />University of Oregon Index of Economic IndicatorsTM, <br /> 106.2 106.4 106.1 105.6 106.1 106.6 <br />1996=100 <br />Percentage Change 0.6 0.2 -0.3 -0.4 0.5 0.5 <br />Diffusion Index 56.3 56.3 37.5 43.8 81.3 43.8 <br />6-Month Percentage Change, Annualized 0.3 -0.1 -0.3 -1.5 0.2 2.0 <br />6-Month Diffusion Index 50.0 37.5 50.0 37.5 62.5 50.0 <br />COLLEGE OF ARTS AND SCIENCES <br />University of Oregon <br />:~' 2006 University of Oregon. Ai' rights rese^red. <br />Released: Jani<ary F 0, X036. <br />fi project o~'the College o,~`'Arts and Scienees and t1~e l~epartmeift of l;conornics <br />