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<br />NOVEMBER 2005
<br />Methodology and Notes
<br />The methodology employed in creating the University of Or-
<br />egon Index of Economic Indicators is identical to that used by
<br />The Conference Board, an independent, not-for-profit research
<br />organization, in the computation of the U.S. Leading Index. For
<br />information, see www.globalindicators.org.
<br />The UO Index is constructed to have the properties of a leading
<br />indicator. As a general rule, a decline in the index of greater
<br />than 2 percent over six months, coupled with a decline in more
<br />than half of its components, signals that a recession is likely
<br />imminent. The 2 percent rule-which has since changed to 3.5
<br />percent due to index revisions-was originally employed by
<br />The Conference Board for the U.S. Leading Indicators, and it
<br />appears appropriate for the UO Index.
<br />Using the rule, the index signaled an impending recession
<br />in January 2001; the National Bureau of Economic Research
<br />(NBER) dates the national recession from March to November
<br />2001. The index did signal the so-called "jobless recovery" that
<br />followed the 2001 recession, but did not falsely predict a dou-
<br />ble-dip recession. No other recessions were signaled during the
<br />period for which data are available (beginning February 1995).
<br />The general rule, however, should be used judiciously. The
<br />available data encompass only one recession, a very small sam-
<br />ple from which to draw generalities. Moreover, no single vari-
<br />able is capable of decisively determining the state of the busi-
<br />nesscycle. Consequently, the UO Index of Economic Indicators
<br />is best considered as another tool in assessing the economy.
<br />Sources: The Conference Board, Oregon Department of Transportation,
<br />Oregon Employment Department, Federal Reserve Bank of St. Louis, Bureau of
<br />Labor Statistics, Census Bureau, and the author's calculations.
<br />Table 2: Index
<br />..,y. .::w.. w_. ~ ...
<br />,o
<br />forum
<br />
<br />Jun.
<br />Jul. 2005
<br />Au Se
<br />Oct.
<br />Nov.
<br />Oregon Initial Unemployment Claims, SA* 6,798 6,819 6,950 6,579 6,346 5,482
<br />Oregon Residential Building Permits, SA 2,715 2,533 2,899 2,492 2,540 2,723
<br />The Oregonian Help-Wanted Ads, SA 22,523 24,431 21,580 22,303 25,168 23,020
<br />Oregon Weight Distance Tax, $ Thousands, SA 18,506 18,85T 18,851 19,854 25,880 21,731
<br />Oregon Total Nonfarm Payrolls, Thousands, SA 1,642.1 1,650.6 1,653.8 1,658.4 1,656.5 1,664.1
<br />Univ. of Michigan U.S. Consumer Confidence 96 96.5 89.1 76.9 74.2 81.6
<br />Real Manufacturer's New Orders for Nondefense,
<br />
<br />Nonaircraft Capital Goods, $ Billions, SA 44,457 42,537 44,206 43,252 43,840 42,957
<br />Interest Rate Spread, 10-Year Treasury Bonds Less
<br />Federal Funds Rate
<br />0.96 0.92 0.76 0.58 0.68 0.54
<br />" SA-seasonally adjusted
<br />Tf~e goal of tf7e University of Oregon lnd
<br />Economic fndicatorsT" is to create a sun
<br />measure of various data that pertain to
<br />the Oregon, economy:
<br />'~` 2G~6 University of Oregon. All rights reserved. ;?eleased; January t 0, 20D6.
<br />
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