Oregon Office of Economic Analysis

Recently our office has brought up initial claims for unemployment insurance a few times, including at the most recent forecast release. The reason was Oregon’s initial claims have been running higher in 2019 than in 2018 throughout much of the year. Now, the increases were more like 5% increases relative to last year and we typically see jumps of 10-20% in the year leading up to a recession. So the increases were a concern, but not yet a red flag. The good news, as shown in this edition of the Graph of the Week, is initial claims in the past month have improved and are now down on a year-over-year basis. Recent readings of initial claims are at historic lows for this time of year with data going back to 1987.

One outstanding concern is that the recent layoff announcements, including food manufacturing closures in the Willamette Valley, have yet to hit the data as the layoffs are recent, with some still to come. We will continue to watch initial claims closely because they are one of the best leading indicators available. Until initial claims increase significantly, the labor market should continue to grow and the expansion endures.