Updating a number of slides ahead of our advisory board meetings tomorrow for the next economic and revenue forecast – release date is set for November 17th, for those who are interested – and thought I should share some of the more interesting items.
First up is a map that examines each U.S. state’s exposure to Europe via exports. Governor’s Council of Economic Advisors member Bill Conerly has the bar graph; we have the map version. This is an important topic to discuss given that most prognosticators and indicators say Europe is already in or very near to a recession. While a mild European recession is not expected to pull the U.S. down with it, export demand from Europe most certainly will decrease and the more a state depends upon exports to Europe, the more that particular state would be expected to feel the slowdown or recession.
The next slide illustrates each Northwest MSA’s employment growth via the bubble graph. What is interesting to note about this in particular is how every single metro and state is showing, essentially, zero employment growth in the past 3 months (the vertical axis). The cities have experienced different employment growth over the past year (horizontal axis), however none have seen sustained growth in recent months.
Given that the employment slowdown has hit nearly every state, Oregon’s employment growth ranking remains among the nation’s best. For September, Oregon’s growth ranked 12th best year-over-year.
The Oregon counties that continue to do the best in terms of unemployment rates are generally associated with the larger metro areas and also the northern counties along the Columbia River. The rural counties have yet to see major improvements in their respective labor markets to date.
Finally, the last two slides take a look at leading and coincident indicators in Oregon. After declining for 5 months, our office’s leading indicator turned slightly positive in September, while both the Total Nonfarm and Coincident Index remain, essentially, flat in recent months. The September University of Oregon index has not been released and it will be interesting to see whether it follows a similar pattern as our office’s index. Also of note is that the probability of recession has decreased this month as the data revisions were mostly positive (preliminary data showed the probability of recession at nearly 9% last month, while the revised data put it at slightly more than 5%).
While the indexes have been down slightly in recent months, the diffusion indexes have not continued to indicate a contraction, at least not for an extended period of time. Both the 1 month and 6 month diffusion indexes continue to hover around the break-even point. Note that these diffusion indexes refer only to our office’s OILI.