Oregon Office of Economic Analysis

On Tuesday, the Oregon Employment Department released the preliminary November employment figures. On a seasonally adjusted basis, Total Nonfarm employment in Oregon increased 6,300 in November, following a revised 6,700 gain in October. The past two months have seen very strong employment growth, in fact, the two months taken together are the largest increase the State has experienced since November and December 2005 (+17,100), or almost exactly five years ago. The private sector increased 5,900 in November, or 93.7 percent of the total increase for the month. Overall, the job gains have been fairly widespread over the past two months. Each month, ten of the fifteen major industries saw increases (see second graph below).

Through the first eleven months of 2010, seasonally adjusted Total Nonfarm employment in Oregon increased 17,200 with the Private Sector increasing 15,900 and the Public Sector gaining 1,300 jobs. On a year-over-year basis, Total Nonfarm employment in Oregon has increased 1.02 percent, or 16,200 jobs, from November 2009. This marks the third consecutive month of positive year-over-year job numbers. In September, employment was up just 400 jobs, or 0.03 percent, from a year ago and in October the numbers increased to 8,100 jobs, or 0.51 percent. While employment remained essentially flat for fifteen months, the two most recent months’ gains have increased Oregon’s employment substantially. Our office’s most recent forecast projected 2010 Q4 employment to increase 0.8 percent (annualized rate) or the fastest increase since prior to the recession, absent Census workers. After the first two months of the quarter, employment is on track to increase at about double the forecasted rate. This recent job growth is stronger than anticipated and is the good kind of surprise one likes to see in the forecasting business. Let us hope that the employment gains continue at a strong pace as the state emerges further from the Great Recession.

Since February 2008 when state total nonfarm employment peaked, Oregon has lost jobs in 27 of the 33 months. Conversely, Oregon has now added jobs in six of the eleven months in 2010. Currently, Total Nonfarm employment is 7.56 percent below peak levels, or 131,400 jobs. 33 months into the early 1980s recession, Oregon had lost 118,600 jobs or 11.05 percent.

The graph below illustrates the monthly net change for each of the fifteen major industries over the past two months. To get the total change over the two months, one would need to add the purple and red portions together. The total two month change by industry is as follows: Mining and Logging (+0), Construction (-1,300), Durable Goods Manufacturing (-500), Nondurable Goods Manufacturing (+1,300), Wholesale Trade (+0), Retail Trade (+4,500), Transportation, Warehousing and Utilities (-100), Financial Activities (+1,000), Professional and Business Services (+1,000), Educational Services (+3,100), Health Services (+1,600), Other Services (-400), Federal Government (-100), State Government (+700) and Local Government (+2,400). All told, the state has seen an increase in 13,000 jobs since September. The bulk of the increases are concentrated in the Retail and Education sectors. Retail Trade gains account for 45 percent of the private sector increases the past two months, or 35 percent of the Total Nonfarm increases. Gains in Educational Services, essentially private education and Local Government, where the gains are almost all due to public education, account for an additional 42 percent of the Total Nonfarm employment gains.

Given that a substantial portion of the job gains have occurred in Retail Trade, it warrants taking a little closer look at the industry. The Employment Department notes that total retail has reached its highest level in nearly two years with sizable gains seen in Clothing and Accessories, General Merchandise and Nonstore retailers. Nonstore retailers, essentially mail-order and online sales as opposed to brick and mortar stores, official definition HERE, gained 1,700 employees on a non-seasonal adjusted basis the past two months (i.e. 1,700 actual job positions were added), that is the industry’s largest such gain since 2005. One item of note that is most likely contributing to this industry is the recent positive press regarding Medford-based Harry and David and the recently Oprah endorsed Centerville Pie Company’s Chicken Pie (Item #10), which is distributed and sold through Harry and David.

As for the Retail Trade industry overall, the graph below illustrates the monthly changes in Retail employment on a non-seasonally adjusted (NSA) basis through November. Taking a long time horizon allows one to see how the industry and seasonal hiring patterns have changed over time. The total industry gains, on a NSA basis, in October and November of this year are the largest since 2000 and indicate increases more associated with economic expansions than recessions. One possibility may be stronger expectations on behalf of retail stores and the general projection for sales this holiday season (retail sales in November where 7.7 percent higher than in November 2009). It warrants mentioning that the vast majority of these jobs are of a limited duration and will be eliminated come January, however they are a useful indicator of business expectations and the mood (i.e. willingness to spend) of the consumer.

Note: 1947-1989 data is based on the Standard Industrial Classification while 1990-2010 data is based on the North American Industry Classification System.

It is interesting to see how the retailers’ hiring patterns have changed over time. From the late 1940s through the mid-1970s the largest monthly increase typically occurred in December, with October normally seeing job losses. This indicates that there was a late push to add employees to handle the holiday season workload (increased sales). The basic story with the changes is that employers have begun hiring workers earlier in the calendar than they did previously, possibly due to the so-called Christmas creep. One can see in the graph the prominence of November hirings which began increasing in the late 1970s and accelerated through the 1990s, while December’s importance in terms of seasonal hirings has diminished over the same time period. The 2010 numbers are indicating strong growth, similar to the 1990s and mid-2000s levels, however given the recent pattern, expectations should be for a relatively small gain in December as the bulk of the seasonal retail hirings have already taken place.