Economists: Oregon's slow job growth doesn't point to recession
Oregon's economy continues to expand and household incomes are growing, but job growth is slowing and the risk of recession is still present.
State economists gave lawmakers their quarterly update on Oregon's economic landscape on Wednesday morning, Nov. 20. Here are five takeaways from their report:
• The risk of a U.S. recession is still present, but slightly lower than before. "While recession risks remain elevated, they appear to be abating somewhat," economists wrote in their report. "The typical catalysts for recession are not rearing their heads but the slowdown in business investment and hiring is problematic."
• Job growth is slowing more than expected. Oregon industries are adding about 2,000 new jobs a month — about 100 more than they need to add to keep the state's low unemployment rate stable. That growth is lower than it has been of late and lower than economists initially expected.
Several industries are behind that slowing: construction, durable manufacturing, leisure and hospitality, professional and business services, and transportation and warehousing. Oregon businesses are advertising jobs less, economists say.
"This is one indication that local firms are looking to hire less than a year or two ago," they wrote. "However, it is an open question as to whether firms are hiring less because they are seeing weaker sales or because the labor market is tight and finding workers is difficult."
• The state's racial poverty gap is significant, but narrowing. About 12.6 percent of Oregonians live in poverty, below the national rate of about 13.1 percent. But a gap persists between white people and people of color, who experience higher rates of poverty. That gap is getting smaller, economists said, with poverty rates among communities of color "at multi-decade lows, if not historic lows," showing that the economic expansion is reaching more people.
• Oregonians are making more per household. A tight labor market is pushing up Oregonians' incomes, economists say. Both low- and high-income households are making more than what they did at the peak of their earnings before the recession. In the past few years, the poorest fifth of Oregon households — those who bring in less than $27,000 per year — have made the most gains. "Of course these households were the hardest hit during the recession and had further ground to regain," state economists wrote. "The good news is that ground has been regained, even if such households still struggle to make ends meet."
• Statewide, layoffs are at "historic lows." Although Oregon is adding jobs more slowly, and initial claims for unemployment insurance are up slightly from this time last year, the overall number of people getting laid off remains quite low, and below typical jumps in the year before a recession. The number of federally required notices businesses are issuing due to significant layoffs has grown somewhat, but that does not tend to be what economists call a "leading indicator," or harbinger, of an economic downturn in Oregon.
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