January 2020 Oregon Statewide Economic Outlook

This is the University of Oregon State of Oregon Economic Indicators for January 2020. The release date March 13, 2020. Special thanks to our sponsor, KeyBank

Link to full report (with charts!) here.

The Oregon Measure of Economic Activity rose in December to 0.69 compared to a The Oregon Measure of Economic Activity slipped below zero on the back of still volatile but generally softer employment growth compared to earlier in the expansion. The moving average measure of growth, which smooths out the volatility, remains in positive territory and indicates above average growth in Oregon. The University of Oregon Index of Economic Indicators rebounded in January after a decline in December.

The combination of measures in this report suggests ongoing economic expansion albeit at a slower pace of growth compared relative to earlier in the economic cycle. The growing threat of the novel coronavirus, however, has greatly clouded the economic outlook. Incoming data, both nationally and local, reflect pre-virus economic activity and hence are not well-suited for judging the path of the economy going forward.

Financial markets, which are often an early indicator of changing economic conditions, are showing clear signs of economic stress through falling equity prices and interest rates.

The coronavirus outbreak exemplifies a pure economic shock with the potential to so quickly disrupt economic behavior that typical forward-looking indicators lag too much to be useful in assessing the risk of recession.

There is likely to be a substantial near-term disruption to the economy; the initial impact will be particularly heavy on tourism and travel industries. Growth will be slow over the next two quarters in particular with high odds of a recession.

Firms should prepare for that possibility by taking sensible planning actions such as reviewing supply chains, identifying options for new opportunities if some lines of business slow, and securing access to credit.

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Tim Duy – 541.346.4660 (w)