Posted by: Josh Lehner | June 14, 2011

Oregon Employment – May 2011

Payroll Employment

This morning, the Oregon Employment Department released the preliminary May employment figures. On a seasonally adjusted basis, Total Nonfarm employment increased 1,300 in May, following a downwardly revised +1,100 gain in April (originally estimated at +1,600). After seeing exceptionally strong growth from September 2010 to February 2011 (average gains of nearly 6,000), the past three months have been decidedly slower. In total, the past three months have only seen job gains, on a seasonally adjusted basis, of 400. This slow down in the Oregon employment picture mirrors that of the nation overall. Employment at the U.S. level has been slowing in recent months, along with the overall economy. On a year-over-year basis, Total Nonfarm employment has increased 1.26 percent from May 2010, or 20,300 jobs. Employment is currently 6.55 percent below pre-recession peak levels, however employment has increased in 7 out of the last 8 months and is at its highest level since January 2009.

Clearly, employment and the economy have stalled in recent months after seeing strong growth just prior to the slowdown. It is interesting to look at the composition of the soft patch in Oregon’s employment. The graph below illustrates the sector by sector employment changes over the past six months on a seasonally adjusted basis. The blue bar represent job changes for the first three months (from November 2010 to February 2011) when the state experienced very strong job growth across nearly all sectors. The red bars represent job changes for the past three months (from February 2011 to May 2011) when the softening hit. During the robust job growth, nearly all sectors saw strong growth with Professional and Business Services, Leisure and Hospitality leading the way with over 9,000 jobs in just those two sectors. Similarly the goods producing sectors, such as Construction, Manufacturing and Trade, Transportation and Utilities (TTU) saw strong growth as well – adding 8,200 jobs combined.

Fast forward three months and the picture changes dramatically. On the bright side, Information has continued to add jobs at the same rate while Financial Activities employment has picked up in recent months, primarily due to increases in the real estate and leasing sub-sector. Similarly, Education and Health Services continues to add jobs, which the industry has done throughout the recession. All other sectors have seen substantial deterioration in their performance., however it is not all bad news. For Manufacturing and TTU, job growth slowed, however it remained positive. The state managed to add 400 Manufacturing jobs in recent months despite the slowdown, which counts as good news and a similar story can be told for TTU. The more pressing concern are the jobs losses in the service industries. (Given the fiscal environment, expectations were for Government to lose jobs this year.) Professional and Business Services had typically been an employment leader in the state in terms of jobs created, however the sector has experienced some job losses in recent months. The declines in Leisure and Hospitality and Other Services total -2,400 between the two sectors. These declines can most likely be attributed to the slowdown in consumer spending on non-food, non-gasoline items. As headline inflation, particularly gasoline prices, has risen in the past handful of months, consumers have continued to spend money, however more and more of it was devoted to food and gasoline costs, leaving less money for other items. As commodity prices in general have declined recently, including the price at the pump, expectations are for consumers to reallocate this money to other goods and services, which should translate into better job numbers across the board, but particularly in the Leisure and Hospitality and Other Services.

Unemployment Rate

The seasonally adjusted unemployment rate in Oregon stands at 9.3 percent in May. The corresponding rate for the nation is 9.1 percent. The 0.2 percent difference between the state and the nation is the smallest since late 2007/early 2008 (prior to that, you have to go back to 1996 to find such a small difference between the two figures). Oregon’s unemployment rate continues to decline as the state adds jobs during the recovery. The decline of 2.3 percentage points (from 11.6 percent in June 2009 to May’s 9.3 percent) is due job growth being stronger than labor force growth. In the second graph below, the dark blue line (Oregon employment from the household survey) is increasing quicker than the light blue line (Oregon labor force). At the national level both the labor force and employment (the two green lines) have, more or less, stagnated in recent months, thus the national unemployment rate has not moved significantly.


Responses

  1. Looks like Oregon had a good month or two compared with the rest of the US.

    http://ecocinar.wordpress.com/


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