Oregon Employment Forecast: Slow and Stable

Entering its eleventh year, the U.S. economic expansion is now the longest in recorded history. Growth slowed in 2019, and the burning question is why? Economic weakness – foretelling a recession – or simply what one might expect in such a mature expansion?

The answer likely lies somewhere in between. Business investment has been weak to nonexistent over the past year. The trade war, tariffs, slowing global growth, and the political climate have hurt sales and created an atmosphere of uncertainty. On the other hand, incomes are rising, inflation is low, and consumer spending is strong. In addition, the economy is at, or near, full employment, which also explains the subdued job growth.

The bottom line is that the U.S. economy remains in expansion mode and while the slowdown in business spending is cause for concern, it does not necessarily portend an imminent recession.

Oregon

Like the nation, Oregon continues to add jobs at a slower pace as our economy transitions from the peak rates of a few years ago to a more sustainable pace today. Oregon’s slowdown points more to labor supply constraints than to economic weakness, according to the latest forecast from the Office of Economic Analysis (OEA). Employers have a dwindling pool to draw from when trying to fill jobs, thus dampening what might have been more robust job creation.

Meanwhile income is rising. In 2018, Oregon’s median household income grew faster than every state except Idaho. After decades of lagging the nation, OEA points out that the typical Oregonian’s household income is now 2.4 percent higher than their national counterparts.

Like the nation, the outlook is positive. OEA expects the state will add 28,200 jobs in 2020 (1.5%), or 2,400 jobs a month; about the same as in 2019. While this is significantly slower than the 4,000-to-5,000 jobs per month of a few years ago, it is enough to absorb new workers entering the labor force given our decelerating population growth.

The public sector will outperform its recent past across most components: Local government will grow as revenues continue to improve in step with the economy, and the federal component will benefit from Census hiring. Private education and health services also accelerates, primarily the healthcare component as our population continues to grow and age. Professional and business services rebounds from its recent slump and adds more jobs than all other broad industries.

OEA expects several industries to slow or lose jobs in 2020. The manufacturing sector turns negative, weighed down by trade issues, global risks, and the announced closure of two NORPAC food processing plants. Construction also decelerates even as the housing rebound continues; growth rates topping 8 percent in recent years are simply unsustainable. The trade, transportation, and utilities sector settles down after the Amazon surge of the past few years, which saw thousands of jobs created in the warehousing component.

While growth should continue in 2020, the next recession is a matter of when, not if. Outside of unforeseen financial or geopolitical shocks, it is unlikely to happen within the next year.

To learn more, read Regional Economist Amy Vander Vliet's full article here.

Occupations with the Largest Share of Older Workers

According to the 2013-2017 five-year estimates (the most current available), about 22 percent of all employed workers in Oregon’s labor force were at least 55 years old. These workers may have an eye on retirement in the near future.

Lawyers, managers, and doctors may be among the occupations where workers have a greater likelihood of nearing retirement. They fall in the top three broad occupational groups with the largest shares of jobs held by workers at least 55 years old. Legal occupations claimed the largest portion (29%), followed by jobs in business, science, or arts management (27%), and healthcare practitioners (26%).

The legal occupations mostly consist of lawyers and legal assistants. Both lawyers and judges were among the occupations in this group with higher shares of workers at least 55 years old. Among the many occupations in management related to business, science, or the arts, those with the largest shares of jobs with workers ages 55 or older included farm and ranch managers, chief executives, and property and real estate managers. Among healthcare practitioners, more than one-third of registered nurses and related nurses were at least 55, as well as the group of health diagnosing and treating practitioners that included acupuncturists and naturopaths.

This scan of professions in groups with the largest shares of workers ages 55 and older yields a list of 17 occupations. These occupations typically require education beyond high school; all but three require at least a bachelor’s degree to meet the minimum qualifications for jobs.

From 2017 to 2027, statewide projections show a net gain of 10,200 jobs in these occupations. An additional 47,100 openings will require newly trained workers to replace those who leave the labor force (largely due to retirement) or make a major occupational change. Among this set of occupations, those with the most total openings in Oregon include registered nurses, farming and ranching managers, clergy, and lawyers. Meanwhile, the fastest-growing occupations in this group are health-centered, including nurse practitioners, health diagnosing and treating practitioners, nurse anesthetists, and midwives.

Read senior analyst Gail Krumenauer's full article here.