Oregon Data Update

The pace of initial unemployment claims in Oregon has fallen for a second consecutive week although it remains at levels that exceed the worst of the last last recession:

The decline in the pace of claims suggests that we are moving through the first round of layoffs associated with the initial shutdown. Although secondary and tertiary impacts will be smaller in magnitude, I expect claims to remain at elevated levels until we can begin to reopen the economy.

Building permits remained solid in March even as shutdowns began:

The April numbers will reveal the impact of the weaker economy while the May numbers will give a greater indication of the degree of resiliency of the housing market in this environment.

The timing of any recovery remains uncertain and largely dependent on the course of the Covid-19 infection. While some activity will bounce back quickly, overall I anticipate a slow recovery as not all social-distancing restrictions will be lifted and consumers will venture out only cautiously. A resumption of “normal” activity will take a considerable amount of time.

February 2020 University of Oregon Regional Economic Indicators

Good morning. Below is the University of Oregon Regional Economic Indexes for February 2020. The release date is April 22, 2020. We thank KeyBank for their generous support of this project.

Oregon Regional Economic Indicators:

Full report with charts here!

Oregon’s largest metropolitan regions entered 2020 on an upward trend that was quickly upended by the Covid-19 pandemic. Highlights of this month’s report include: Continue Reading

University of Oregon Statewide Economic Indicators – February 2020

This is the University of Oregon State of Oregon Economic Indicators for February 2020. The release date April 6, 2020. Special thanks to our sponsor, KeyBank

Link to full report (with charts!) here.

The Oregon Measure of Economic Activity rose in February from 0.07 to 0.71. The moving average measure, which smooths out the volatility, remains in positive territory and indicates above average growth in Oregon. The University of Oregon Index of Economic Indicators slipped 0.2% during the month; it has been moving largely sideways for several months. Continue Reading

University of Oregon Economic Indicators – Crisis Update 3/30/20

A few items for you consideration this morning:

1.) My column at Bloomberg from last week:

The Federal Reserve has taken unprecedented steps in recent weeks to cushion the U.S. economy from the effects of the expanding coronavirus pandemic, including slashing its benchmark interest rate back to zero and eliciting the usual cries that the central bank is “out of ammunition.” Nothing could be further from the truth.

Continued here…

2.) Consumer confidence tumbled in March, but remained within its recent range:

Expect further declines in April as the unemployment rate climbs higher.

3.) Speaking of unemployment, last week the CARES (Coronavirus Aid, Relief, and Economic Security) Act was signed into law. The act provides for enhanced unemployment benefits of $600/week for up to 4 months on top of state benefits and includes the expansion of benefits to “gig workers.” The additional benefits will push the average replacement income for eligible workers in Oregon about 100%:

This is very substantial support for unemployed workers and should help cushion the economy during this “sudden stop” of economic activity.  For more information of state-by-state comparisons, see this report from the University of Wisconsin (source of above chart).

4.) The CARES Act also provides support for small- and medium-sized firms. Of particular importance is the Paycheck Protection Program which provides forgivable loans to cover payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments. The loans do not require a personal guarantee or collateral. The hope is to have these loans available as early as this week. Like enhanced unemployment insurance, this is the type of program that, if utilized quickly, can help firms stay afloat and preserve the basic structure of the economy. More more information, see this from the U.S. Chamber of Commerce.

5.) For helping to plan when we might see the other side of this crisis, see this helpful report from the American Enterprise Institute: National coronavirus response: A road map to reopening.

6.) On the academic side, see this report from the New York Federal Reserve on the benefits of early and aggressive action to contain pandemics:

Our paper yields two main insights. First, we find that areas that were more severely affected by the 1918 Flu Pandemic saw a sharp and persistent decline in real economic activity. Second, we find that cities that implemented early and extensive NPIs suffered no adverse economic effects over the medium term. On the contrary, cities that intervened earlier and more aggressively experienced a relative increase in real economic activity after the pandemic subsided. Altogether, our findings suggest that pandemics can have substantial economic costs, and NPIs can lead to both better economic outcomes and lower mortality rates.


7.) Finally, please stay safe! We are seeing distressing reports that the deaths attributable to the novel coronavirus in China may be far higher than originally reported. From Bloomberg:

The long lines and stacks of ash urns greeting family members of the dead at funeral homes in Wuhan are spurring questions about the true scale of coronavirus casualties at the epicenter of the outbreak, renewing pressure on a Chinese government struggling to control its containment narrative.