The market's up, unemployment's down, and the graffiti index in downtown Portland just gained a point.

The building across the street from my office, once decorated with personal art, now wears a new swath of fresh, clean paint. It was time. Having sat for several years grimy and neglected, the façade offered apparently the perfect canvas for a stealthy soul with a message burning in his heart. And so one morning the view from my window had added color: bold white and red bubble letters, a "B" and a "T" a yard high, and lesser scribbles around them.

There the artwork remained, forlorn and symbolic as the economy sank lower and lower, until last week the swipe of a painter's roller -- plus new windows and frames and the activity of workmen -- signaled new possibility and most likely a new neighbor.

It's a hopeful sign at a time when every movement on the economic landscape is scrutinized for hope.

In all seriousness, as we begin this new year the economic signs are cause for, as economists like to say, cautious optimism. Nationally, the vitality has surprised even the experts: Consumer confidence is way high, and the GDP jumped a whole point from October to November (though check out future oregon and Northwest Environment Watch's take on GDP, p. 16). Even in Oregon there's a palpable heartbeat. We've seen a definite "slowdown in layoffs," says the employment department, which might sound like faint praise to another state but not to one that's lost 60,000 jobs in three years.

Though the experts call this recovery jobless, Oregon's unemployment, too long the worst among all states', has improved slightly from 8.5% in June to 7.3% in November, too small a downtick to call a victory but too happy a thing to ignore. This holiday season, retailers statewide seemed more hopeful than last, hiring twice as many Santas and helpers (2,000 of them) and selling goods without the deep discounts of '02.

As for commercial real estate, the graffiti-free building on the corner is not the only one expecting new tenants. Building owners and agents say office and retail vacancy rates are projected to come down this year -- finally. And on the residential side, despite trepidation about mortgage interest rates eventually rising, Oregon's ongoing attractiveness to outsiders may cushion the impact. Even throughout the slump we've steadily drawn newcomers, and the increasing population could supplant low interest rates as the driving force for home-buying.

To launch the year, this issue of Oregon Business explores a variety of other indicators by way of the oregon index (p. 16) and the state we're in (p. 48).

One thing is clear: The mood index is up. Oregonians are feeling better about the business climate and prospects for the near future. Now, if we have the discipline to apply the lessons hard learned during the slump -- to plan strategically, run lean and live within our budgets -- 2004 may well be a decent year.

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Copyright 2004 Oregon Business magazine