Oregon Office of Economic Analysis

The Oregon Employment Department released the preliminary February employment estimates today. On a seasonally adjusted basis, total nonfarm employment in February was 1,590,500, a decrease of 1,200 from January and the same level as December 2009. Total nonfarm employment appears to be bouncing along the bottom as job losses slowed considerably in recent months. The average loss in the past five months (Oct 2009 through Feb 2010) was 800 jobs, while the average loss in the first nine months of 2009 (Jan-Sept 2009) was 8,400 jobs. Two months into 2010, employment is flat given the 1,200 increase in January and 1,200 decrease in February. On a year-over-year basis, employment fell 53,100 between February 2009 and February 2010, or 3.2 percent.

Employment in Oregon peaked in February 2008 and has declined in 23 of the 24 months since. Total job loss since peak employment is 148,600, or 8.5 percent. This makes the current recession the deepest employment recession in Oregon through the first 24 months (see graph below). Twenty-four months into the early 1980s recession, Oregon employment fell 7.6 percent or a total of 82,000 jobs. (Remember, Oregon’s total population and workforce population were significantly smaller three decades ago) All told, employment fell nearly 12 percent between late 1979 and late 1982, or a total of approximately 126,000 jobs. The current recession has seen a larger total loss of jobs, however as a percentage of the total peak employment, job losses this recession are forecasted to be smaller than in the early 1980s.

Also included in the February report was the unemployment rate estimate. On a seasonally adjusted basis, Oregon’s unemployment rate was 10.5 percent in February, essentially unchanged from the revised 10.7 percent in January. The unemployment rate in February 2009 was 10.6 percent; however, the rate has declined steadily since reaching its peak in May and June 2009 at 11.6 percent. The unemployment rate is based on what is commonly referred to as the “household survey”, which provides monthly estimates on the number of labor force participants and the levels of employment and unemployment. The graph below compares the relative changes in Oregon’s labor market with the national labor market from Jan 1990 through February 2010.

Oregon’s unemployment rate increased rapidly between early fall 2008 and the spring of 2009, rising at least six tenths of a percentage point (0.6) each month during the October 2008 through March 2009 time period. This sharp increase in the unemployment rate was a direct result of significant job losses in the state coupled with a large increase in the number of labor force participants. Having both of these occur simultaneously resulted in the large unemployment rate increase month after month as the rate rose from 7.1 percent in September 2008 to 11.2 percent in March 2009. At the same time, the US rate only increased from 6.2 percent to 8.6 percent. This occurred due to a lower level of job losses, relative to Oregon, but also a leveling off in the labor force, represented by the dark blue line in the graph above.

From March 2009 through December 2009, Oregon’s labor force declined as the level of job losses slowed as well. This resulted in a leveling off and decline in Oregon’s unemployment rate in the past 10-12 months. In both January and February 2010 the level of self reported employment in the household survey has increased (light green line) as well as the number of individuals seeking employment. The increase in the labor force is expected – as the job market improves, more individuals will return to the labor market seeking work. Some of the increase in the labor force will be new entrants (recent migrants and/or students who finish school) and some will be individuals who previously stopped looking for work, but are now returning. This is expected to continue in the coming year, helping to keep upward pressure on the labor force number and even as jobs are forecasted to increase through the rest of the year, the unemployment rate is expected to remain at an elevated number.

Posted by Josh Lehner