Excerpts from a presentation Dec. 17 to the Portland Business Alliance Breakfast Forum by John Mitchell, U.S. Bancorp economist. Mitchell was speaking on anticipated economic trends in 2004.

'There has been an extended period of decline nationally in the purchase of business equipment and software. It's not a coincidence that this coincides with a period of weakness in Oregon.

'There hasn't been a decline in consumer spending. It doesn't matter what people said in those consumer confidence surveys. If they were happy or sad, they still spent.

'There has been no decline in housing. In every other recession, housing has been very volatile. Our economy has been growing, but the sources of strength have changed.

'The missing thing in the recovery has been jobs. But now we have four consecutive months of growth in payroll employment.

'How can the economy grow without new jobs? Productivity. Back in the '70s, business magazines were always bemoaning, 'What about U.S. productivity? It's lagging.' You don't hear that anymore. This has been phenomenal. If you have a business with the same people working the same hours, you are probably making 8 percent more stuff this year.

'It's interesting: We're watching the late Dr. Atkins drive up the consumer price index. The price of meat and eggs has been one of the biggest drivers of inflation.

'On my desk at the bank is a little computer. And on that computer is a little green sticker. It reads, 'Y2K compliant.' And you know what that means? That means it's ancient!'

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