The US economy continues to deteriorate at a pace not seen in generations. Portland is one of the areas of the US experiencing unusually high unemployment rates and job losses. By the spring of 2009, the Portland Metro area has lost almost 60,000 jobs since the end of 2007. As we continue into the rest of 2009, those job losses are likely to increase. Every month, economic statistics reveal the degree of economic pain we are experiencing and suggest when the decline might end.
Figure 1: Unemployment Rates in the Portland MSA (January 2007-March 2009)
Source: Bureau of Labor Statistics “Local Area Employment Statistics” January 2007-March 2009.
Figure 2: Job Growth Rates in the Portland MSA and the United States (January 2007-March 2009)
Sources: Bureau of Labor Statistics, Current Labor Statistics (accessed through Oregon Dept. of Employment’s qualityinfo.org website)
Figure 3: Employment Growth Rates by Industry Sector in the Portland MSA
Source: Bureau of Labor Statistics, Current Employment Statistics by Industry
Figure 4: S&P/Case-Shiller Home Price Indices for the Portland MSA and the United States (January 2004-March 2009)
Source: Standard and Poor’s.
Figure 5: Annual Housing Permits issued in the Portland MSA (2006-2009)
Source: U.S. Census Bureau Residential Housing Units by MSA, 2006-2009.
Figure 6: Population and Employment Growth in the Portland MSA (2001-2008)
Sources: U.S. Census Bureau Population Estimates and Bureau of Labor Statistics Current Current Employment Statistics
The unemployment rate in the Portland Metro area continues to increase at record speed – see Figure 1. March statistics indicate that Oregon, at 12.1%, has the second highest unemployment rate in the US, just a half point behind Michigan.
The Metro area lost almost 44,000 jobs in the 12 months leading up to March 2009, representing 4.4% of all jobs. For comparison, the US lost 3.5% of all jobs. See Figure 2. Certain industries were hit harder than others. While the Health Care and Private Education industries continue to grow, every other industry has lost jobs over the last 12 months. Particularly hard hit was manufacturing, which has lost almost one in twelve jobs in the last 12 months. See Figure 3.
The industry with the most job loss is undoubtedly the Construction industry, which has lost more than one in seven jobs year over year. The real estate bubble burst in late 2007, and the value of Portland homes continues to drop. Every month, Standard & Poor’s publishing an estimate of the value of houses in the US Metro areas. Since the summer of 2007, the value of the average Portland area home has declined by almost 20 percent. Of greater concern, the value of homes is continuing to fall at an increasing rate. See Figure 4.
No one knows when housing values, or the job market, will stop dropping. A popular economic indicator is housing permit data. Before a construction company can hire people to work on building a new house, they must apply for a housing permit. In the first quarter of 2009, 741 permits were issued, that’s less than one fifth of the number of permits issued in the first quarter of 2007, during the height of the housing boom. This suggests that jobs, at least in the construction industry will continue to disappear through 2009. That’s bad news for an industry that’s already lost about 25 percent of all jobs since the summer of 2007. See Figure 5.
Portland’s economic troubles are severe, and few metro areas in the US have posted higher unemployment rates. However, the region’s high unemployment rate is not simply a function of the jobs lost. As we’ve lost jobs, Portland’s workforce has continued to grow, primarily from migrants coming from other US states. In the 12 months ending in June 2008, the Portland Metro population grew by more than 30,000 people – as the weakening job market created only about 6,000 new jobs. See Figure 6.
This is not a new situation for us. Every month in 2002, during the last recession, Oregon had the highest unemployment rate in the US. Oregon, and Portland’s, population continued to grow as we lost jobs. This unusual trend pushed Oregon’s unemployment rate to the highest in the nation in the last recession, and may do so again in 2009.
