Oregon Office of Economic Analysis

There is no question that Oregon’s labor market has accelerated considerably in the past couple of years. The million dollar question is — or in this case potentially hundreds of millions of dollars in General Fund revenue — “Is this as good as it gets for the Oregon economy?” At least in terms of growth rates? Followed quickly by “How long does it last?” These are the questions we will be discussing with our advisors this week in our meetings, ahead of our next forecast (May 14th release.)

Clearly the pace of growth has picked up and is as good as, if not better than, what Oregon experienced during them mid-2000s. However that does not mean all is well with the economy, even if the trajectory has improved considerably. It takes time to dig out from something as severe as the Great Recession. That’s why our office has worked on additional measures like the Economic Recovery Scorecard, the Total Employment Gap, and job polarization (e.g. HERE, HERE, HERE.)

With that being said, our office’s primary focus is the economic and revenue forecast for the state which focuses on the aggregate figures (total jobs, total wages, overall cigarette and tobacco sales, etc.) From this top-line vantage point, Oregon’s growth is doing well. While we expect strong growth to continue in the near-term, such growth is already built into our baseline forecast. The key question is whether or not we and our advisors think growth will be a bit stronger, or potentially a bit weaker, that what we already have built into the outlook.

We cannot discount the real possibility that in a few years’ time, we will look back on today as the peak of the business cycle in terms of growth rates. So this may really be as good as it gets, even as the recovery still has legs to run before the next recession.