UO index: Oregon’s economy has ‘slipped into deep contraction’

'Current environment is unprecedented'; 'slow and choppy' recovery seen

EUGENE, Ore. (KTVZ) -- One of the first measures of COVID-19's impact on Oregon's economy, released Wednesday, said what just about everyone already knows: The state's "economy has slipped into a deep contraction."

The Oregon Measure of Economic Activity fell from 0.41 in February to -1.05 in March, according to the report, issued by UO economics professor Tim Duy.

Details of the report:

• The moving average measure, which smooths out the volatility, recorded a less-precipitous decline but also fell below zero, indicating below average growth for the Oregon economy.
• The University of Oregon Index of Economic Indicators plunged 3.6% in March. A historic rise of initial unemployment claims in the wake of business shutdowns to contain the spread of COVID-19 drove the decline.
• Falling employment services payrolls (temporary help) also contributed to the decline; both are leading indicators, suggesting weaker economic conditions in the months ahead. Declining consumer sentiment also weighed on the UO index.
• Remaining components have yet to see much impact from the economic shutdown. Building permits, trucking activity, hours worked in manufacturing, and core durable goods orders were all modestly better to little changed in March. The resiliency of these indicators, however, will likely be short-lived.
• The economy has slipped into a deep contraction. The current environment is unprecedented as it reflects the impact of deliberately shutting down portions of the economy and in the process creating a large negative demand shock.
• The timing and magnitude of the subsequent recovery will be largely determined by the evolution of the pandemic; most likely the economy will firm in the third quarter but recovery will be slow and choppy.

Link to full report (with charts) here.