The August 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.
Incoming data continue to indicate that Oregon is in the midst of a more mature stage of the business cycle as the pace of growth levels off after the acceleration out of the recession. Highlights of this month’s report include:
- The Oregon measure of economic activity rose to 0.84 from a downwardly adjusted revised July figure of 0.61. The three-month moving average, which smooths month-to-month volatility in the measure held constant at 0.66, where “zero” indicates average growth over the 1990-present period.
- The manufacturing sector again made a nearly neutral contribution to the measure; national manufacturing surveys were a weight on the sector. Positive contributions from employment and housing permits bolstered the construction component.
The University of Oregon Index of Economic Indicators slipped 0.3 percent in August while the July number was revised modestly upward. Similar to the previous month, most indicators were generally unchanged to modestly softer.
- Employment services payrolls (largely temporary help employees) fell, breaking through the lower end of its recent range. This indicator bears watching, as it may indicate a broader slowdown in activity in the months ahead.
- It may also, however, reflect a weak manufacturing environment. See also the persistent weakness in the core manufacturing new orders. To date, manufacturing weakness has remained contained and not spread more broadly throughout the economy. Moreover, the sector is expected to improve as the negative impact of lower oil prices and a stronger dollar wane.
- Together, these indicators suggest ongoing growth in Oregon at an above average pace of activity. The UO Index typically moves sideways as a business cycle matures. Consequently, occasional declines are to be expected.