NEWS

Oregon economy is growing, but labor force is shrinking

Brandon Southward Statesman Journal
Tim Duy

Oregon's jobless rate fell to its lowest level in almost eight years during April, while a strong economy added 7,600 jobs.

Unemployment declined to 5.2 percent — down from 5.4 percent in March — and equaled the the 5.2 percent rate in July 2007, according to data released Tuesday by the Oregon Employment Department.

The rate is now back to the levels it achieved during 2006 and maintained through the early part of 2008. During that period the rate hovered between 5.0 and 5.5 percent.

Tim Duy, a professor at the University of Oregon and the senior director of the Oregon Economic Forum, cautioned against focusing on just the unemployment number to gauge the strength of Oregon's economic recovery.

He pointed to two factors at play: actual, strong jobs growth and a labor force that's shrinking.

"The recent decrease in labor force participation is something of a mystery at the moment," he said. "The labor department uses the household survey as a way of calculating labor participation. That model could be incorrect, thus the mystery of shrinking labor participation. In most economic recoveries there isn't typically a drop in labor participation."

The state's payroll employment grew at a rapid pace, and the 7,600 jobs added in April continued a strong hiring period for Oregon. April's numbers followed revised gains of 2,600 in February and 2,700 in March. From September through January, the Oregon economy added an average of 6,200 jobs per month.

The state's recent growth is similar to what it experienced before the recession. From mid-2004 to 2006, jobs expanded by an average of 3.0 percent annually, while the recent job growth has had a rate of 3.2 percent between April 2014 and April 2015.

Four industries that grew year over year were health care and social assistance, manufacturing, professional and business services and leisure and hospitality. Health care and social assistance was the biggest gainer of the four and was up 11,200 jobs over the year.

Those non-farm payrolls are what Duy recommends focusing on to see the growth and strength in the Oregon economy.

He believes Oregon's economy is growing at a healthy rate, just not as rapidly as the unemployment numbers would suggest.

"The unemployment is likely overstating the strength of the economy's recovery," Duy said. "I think the Oregon economy is growing at a solid pace though I don't believe that we have accelerated as quickly as the unemployment rate number would have you believe."

bsouthward@StatesmanJournal.com, (503) 399-6709 or follow on Twitter @B_Southward