University of Oregon index claims state labor market bounces back

Daily Journal of Commerce (Portland, OR), Aug 5, 2008 by Report

Despite a recent rebound by the Oregon labor market, the University of Oregon's index of economic indicators' author, Tim Duy, suggests that labor market conditions will remain challenged.

Oregon's labor market improved in June after a weak showing in May. Nonfarm payrolls rose by 1,600, the first increase after three months of decline. However, the improvement followed a large downward revision of the May data, from an initially reported job loss of 3,700 to a loss of 6,100. Nonfarm payrolls increased only 0.2 percent compared to June 2007, with a net job loss of 7,500 over the past four months. Initial unemployment claims held steady at 8,000, and help-wanted advertising in Oregon newspapers increased.

All indicators on the index, with the exception of consumer confidence, rose in June, including residential building permits, Oregon weight-distance tax, new orders for non-defense non-aircraft capital goods and the yield spread, which is difference between short-term and long-term interest rates.

Duy credits stimulative monetary conditions combined with federal tax rebates and increasing core manufacturing orders for the stabilization of Oregon's economic condition in June. However, he predicts that the labor market will continue to feel the pinch of ongoing restructuring away from the industries affected by the housing bubble.