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Unemployment rate ticks up, but jobs recovery is complete

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Rate of 3.7% still relatively low, but Oregon has surpassed total jobs at onset of the pandemic in early 2020.

Oregon Capital Bureau

Oregon’s unemployment rate ticked up from 3.5% to 3.7% in August — the first increase since the big jump at the onset of the coronavirus pandemic in spring 2020 — but Oregon has also regained all of the jobs lost during that sharp downturn.

The 3.7% rate matched the national average. It’s still low by historical standards, which go back to 1976 — and Oregon’s most recent low was 3.4% during the four months from November 2019 through February 2020. (Some records predate 1976 but are not comparable with current data.)

“We are still near that record low rate we saw just before the pandemic,” Gail Krumenauer, Oregon Employment Department economist, told reporters during a video briefing Wednesday.

“Oregon is still experiencing labor growth and strong job gains in 2022.”

Among the sectors that led growth in August: Government, 3,800, mostly in public schools, which laid off fewer workers this summer than in past summers; leisure and hospitality (restaurants, bars, lodging, entertainment, 1,900; construction, 1,400; professional and business services, 1,000; manufacturing, 900. Two sectors lost more than 500 jobs: Other, 800, and financial activities, 700.

Oregon’s overall total of 1,974,700 jobs in August surpassed the pre-pandemic February 2020 mark by 2,500. The private sector has now regained all its lost jobs.

The leisure and hospitality sector remains 12,000 short of its pre-pandemic level.

But Krumenauer said it has led growth during the past 12 months with 18,500 jobs, 9.9%. Other gainers during the year: Construction, 9,600, 8.7%; manufacturing, 9,900, 5.3%, and professional and business services,1,700, 4.7%.

Some sectors now count more jobs than before the pandemic: Construction, manufacturing, trade, transportation/warehousing/utilities, professional and technical services, real estate and rentals and leasing.

Oregon participation in the labor force has leveled off at 63.5%. “It’s still the highest participation rate we have seen in a decade in Oregon,” Krumenauer said.

Although the ratio is dropping, Oregon for a full year had twice as many jobs available as there were unemployed people — and employers reported that many were hard to fill for various reasons.

The Oregon Office of Economic Analysis, which prepares the state’s quarterly economic and revenue forecasts, had projected a full recovery by the end of this year.

The mix of jobs now is different. The Employment Department released a report in August, dating back to the two years since the onset of the pandemic. Based on payroll records, the report showed 36% of those laid off returned to their employers, and 12% had a different employer but in the same economic sector. Workers who ended up in a different sector accounted for 23%. Others left the labor force, left Oregon — or simply retired.

Two downturns

But Oregon’s recovery from the pandemic recession was slightly more than two years, far quicker than the almost seven years it took Oregon to rebound from the Great Recession (2007-09).

Krumenauer said both were dramatic, but in different ways.

“We took what was otherwise a healthy economy and shut down businesses for public health and safety measures during a global pandemic,” she said.

“A lot of the layoffs we saw — about 9 out of 10 — were temporary, even though some of the closures lasted a while. Employers were able to bring back a lot of those workers. That was different than we saw in the downturn before.”

In contrast, subprime mortgages and speculation led to a burst in housing prices, then a collapse of financial markets in fall 2008, almost a year after economists pinpointed the start of that downturn to December 2007.

“We were still losing jobs two years into that recession,” Krumenauer said. “Most of those layoffs were permanent. Once the recession stopped, we saw slow job growth the first couple of years afterward. So that extended the recovery time.”

Acting Director David Gerstenfeld has said that while it took 18 months for Oregon employment to drop to its lowest levels during that earlier downturn, the onset of the pandemic resulted in a record one-month increase in the unemployment rate — from 3.4% in March to 13.3% in April 2020. During 2020, 580,000 Oregonians drew a record $7.5 billion in unemployment benefit payments — more than the state had paid out in the previous decade.

“In that sense, it was a more dramatic impact” than the earlier downturn, he said.

Federal aid vital

Gerstenfeld led the agency’s unemployment benefits division from 2011 to 2019, and became acting director in May 2020.

He said the remaining 200 limited-duration workers hired two years ago to help with Oregon’s record number of unemployment benefit claims will lose their jobs Sept. 30 because of diminishing federal aid. Oregon and other states rely on money from the U.S. Department of Labor to staff their employment agencies.

Unemployment benefits — some made available by Congress for the first time to self-employed and gig workers — helped keep the U.S. economy afloat, along with stimulus payments to households and forgivable loans to businesses.

The CARES Act in March 2020 provided $2.2 trillion; the American Rescue Plan Act a year later provided $1.9 trillion more.

“A number of stimulus efforts, including unemployment benefits from various programs, were a key part of that recovery,” Gerstenfeld said. “It kept the underlying health of the economy strong when the preventative health measures took effect.”

Although households are accumulating debt again, the pandemic allowed many to pay down what they owe. Krumenauer said consumers are still seeking goods and services, which account for 70% of the U.S. economic activity.

“Even as inflation has picked up, we have seen that strong demand continue,” she said. “It has put us in a situation in Oregon and across the United States where there are more job openings than unemployed people.”


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