May 2019 Oregon Statewide Economic Indicators

This is the University of Oregon State of Oregon Economic Indicators for May 2019. The release date is July 12, 2019. Special thanks to our sponsor, KeyBank

Link to full report (with expanded charts!) here.

The Oregon Measure of Economic Activity fell to 0.17 in May, down from an upwardly-revised 0.55 in April. Highlights of this month’s report include:

• The moving average measure, which smooths out the volatility, fell to 0.48, still above average (“zero” indicates average growth over the 1990-present period).
• The manufacturing sector contributed negatively; the weakness was concentrated in the national measures for imports by the manufacturing sector (which historically weaken if the domestic economy slows) and the still-puzzling decline in average weekly hours work while the employment component was neutral.
• The University of Oregon Index of Economic Indicators was flat in May. Most indicators were fairly unchanged during the month.
• On the positive side, core manufacturing orders for capital goods edged higher despite some general softening across the sector. The continued strength is encouraging; the data have not weakened as they did during the 2015-16 bust that followed a sharp decline in oil prices.
• On the negative side, the spread between long- and short-term interest rates fell to just 0.01 percentage points; in June the spread turned negative. This bears watching as a negative yield spread has been a very good recession indicator in the past though, unlike past episodes, the Federal Reserve has already signaled an intention to cut interest rates.

The recent weakness of the UO Index remains insufficient to raise imminent recession concerns. It’s behavior instead is consistent with a mature business cycle in which growth is relatively slower compared to early in the expansion. The Oregon Measure of Economic Activity is consistent with this interpretation. Indicators overall still suggest the Oregon economy is poised for continued growth.

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