Oregon loses jobs for the first time since 2021

Oregon’s spectacular rebound from the pandemic recession may be coming to an end.

In January, the state posted a net loss in jobs compared to a year earlier — the first time that has happened since 2021. And the unemployment rate climbed above 4% for the first time in more than a year.

This isn’t a recession. Far from it.

Wages continue climbing and Oregon’s labor market remains tight, by historical standards. Employers say it’s still very hard to find workers.

Still, it’s clear that the robust growth that got underway three years ago, in the wake of COVID-19, is at last winding down.

The state had 1.97 million jobs in January, according to the latest seasonally adjusted data from the Oregon Employment Department. That’s about 5,000 fewer jobs than it had a year earlier.

It’s a tiny decline overall, 0.2% on an annual basis. But it’s a sharp contrast to the prior three years, when Oregon was adding several thousand jobs each month as the state roared back from the pandemic.

The slowdown isn’t a big surprise. Oregon’s workforce had regained all the jobs it lost to the pandemic by the start of last year and, with the state’s population stagnant, Oregon simply doesn’t have more people to fill job openings.

Oregon’s slight decline in employment compares to 1.9% job growth nationally over the last 12 months. Employment department economist Gail Krumenauer notes in a new report that Oregon’s slowdowns came mostly in the latter part of the year.

Manufacturing was among Oregon’s weakest sectors last year, according to Krumenauer, declining by 3.4%. The state’s factories began shedding jobs in 2022 and continued their downward trajectory through most of last year.

Blame the semiconductor industry for much of that decline. Chipmakers pulled back last year from three years of outstanding growth. Economists are expecting better results over the next few years as factory upgrades get underway at Intel and other large Oregon chip factories.

In 2023, Oregon also shed jobs in retail — a sector that never fully recovered from the pandemic — and posted declines in categories that include building maintenance and call centers.

Oregon’s biggest gains, Krumenauer found, were in health care, local government and hospitality jobs. Construction, which had appeared to be a standout sector last year, actually grew little over the past 18 months, according to newly revised state data.

State economists expect Oregon will resume adding jobs this year, growing by almost 16,000 positions over the next year. Krumenauer notes that works out to about 1% annual growth, anemic by recent standards but suggestive of a state economy that is solid, though no longer spectacular.

This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.

-- Mike Rogoway covers Oregon technology and the state economy. Reach him at mrogoway@oregonian.com

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