Wednesday, August 29, 2012

Business Employment Dynamics Linked to Local Climate

Business Employment Dynamics (BED) job flow data provide information that can help explain variations in net job change. Oregon's impressive third quarter growth was fueled by a large increase in gross job gains combined with a significant decrease in gross job losses. At the national level, however, gross job gains and gross job losses both remained relatively flat.

Just as checking account owners have different spending patterns, businesses have different patterns of hiring and releasing workers. The amount of "job churn" in an economy can be quantified by adding up gross job gains and gross job losses. This sum is called "gross job reallocation", and it varies according to numerous factors including industry and locality.

One way to illustrate the difference in job flow dynamics between Oregon and the U.S. is to compare job reallocation rates in the various industry sectors at the state and national levels (see graph below). In most industries, the average seasonally adjusted rate of quarterly job churn in Oregon is within 2 percentage points of the national rate. The outstanding exception is natural resources and mining. The average quarterly job reallocation rate in this sector is 15.9 percentage points higher for Oregon than for the nation as a whole.

This means that Oregon's natural resources and mining industry is more seasonally dynamic than that of the U.S. overall. In Oregon, a disproportionately large share of natural resources and mining jobs are being created or destroyed from one quarter to the next. Job flows in this industry carry more weight in Oregon. An atypical seasonal employment pattern in this sector could significantly alter statewide trends.

The dominance of crop production in Oregon's natural resources and mining sector has a definite effect on employment data. More than any other subsector, crop production exhibits a strongly seasonal hiring pattern that is primarily influenced by weather and climate conditions rather than by the calendar itself. For all the advances of modern technology, farmers still look to the earth and the sky to tell them when to plant and harvest. Weather patterns also help dictate how much labor will be required for pest control or disease prevention tasks, and other fieldwork throughout the growing season. The number of workers needed and the timing and duration of their employment are strongly tied to local conditions.

Learn more about Business Employment Dynamics and seasonal patterns in the full article, written by Research Analyst Phoebe Colman.

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