Recession News Yields Conflicting Conclusions
Regional economic health is certainly a contributing factor to consumer confidence, and by extension, is a weighty concern for those considering a home sale or purchase. By and large, the national media has viewed the Northwest favorably in terms of housing stability, the job climate, and so on.
But recent reports can be a little confusing. Friday’s USA Today ran an article on recession risks, showing Oregon in an ‘expansion’ mode. Yet the University of Oregon Economic Forum suggests the region is still ripe for recession. So, which is it?
According to USA Today/Moody’s Economy.com report, based on its key indicators (including employment, production, retail sales), Oregon charted as growing its economy and held top 10 positions for healthy home value increases, an improving agricultural revenue base, and a high percentage of exports. Only the Medford MSA was shown as ‘at risk’; how Bend evaded that tag, I don’t know.
Meanwhile, the University of Oregon’s report on Economic Indicators suggests otherwise, based on its review of unemployment, building permits, production and other index components:
The University of Oregon Index of Economic Indicators rose 0.2 percent in December, to 102.6 (1997=100), with the majority of index components improving during the month. Despite the December gains, the behavior of the index in recent months remains consistent with a substantial risk of recession in the near future.
Both studies are measuring similar (not identical) factors (I encourage you to visit both sites to view their methodologies), but have come to different conclusions. Despite some recent gains in manufacturing, the U of O study cites weakness in labor, housing, and consumer confidence as their main contributors.
So, how do you view these reports? Some will say they are inconclusive; others will claim we are in denial. How does it affect your decision to buy or sell a home? Or are broad economic measures less important than the state of the real estate market specifically?
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3 comments March 10th, 2008
