The February 2016 State of Oregon Economic Indexes of was released today. Full report is available here. We thank KeyBank for their generous support of this project.
The Oregon economy continued to grow in February at a pace consistent with past expansions. Highlights of the report include:
- The Oregon measure of economic activity was a touch softer than the previous month, but the three-month moving average, which smooths month-to-month volatility in the measure, has been hovering in a tight range for the past three months (“zero” indicates average growth over the 1990-present period).
- The manufacturing sector was a net negative in February, largely driven by national factors but also a fall in Oregon employment in the sector. The construction sector was supportive of the measure, largely due to employment growth. Building permits are tracking at an average level; they are typically higher during Oregon expansions. The household sector provided the largest boost to the measure.
- The University of Oregon Index of Economic Indicators edged up 0.1% in February. Sharply lower initial unemployment claims held steady while employment services payrolls (largely temporary help workers) rose; the two factors together drove the overall index higher and consistent with further job gains in Oregon.
- Remaining indicators were generally flat compared to the previous month. Core-manufacturing (nondefense, nonaircraft capital goods) orders (a national indicator) fell, continuing to track sideways as lower oil prices and a stronger dollar weigh on the sector.
- Notably, the interest rate spread fell as financial market participants reassessed the path of monetary policy and concluded a shallower path of rate hikes was likely.
These two indicators suggest ongoing growth in Oregon at an above average pace of activity. The ongoing US economic expansion provides sufficient support to sustain Oregon’s economy for the foreseeable future.