Unemployment Across Oregon Hits New Lows
Unemployment in Oregon has hit a new low according to recent data from the United States Bureau of Labor Statistics (BLS). After hitting a high of 11.4% in June of 2009, unemployment in Portland (Multnomah County) hit 3.1% for April according to the BLS. South of Portland, Marion County- which is home to the State capital, Salem- tumbled from a 2009 high of 12.7% to 3.7% in April.
Some less urban counties have seen even more dramatic turnarounds to date. Lane County (Eugene & Springfield) has recovered from a recession high unemployment rate of 14% to just 3.8% in the most recent report from the BLS. Lane County had been one of the hardest hit counties in the State during the recession, in part due to its high share of young adults as home to the University of Oregon (student population: 24,000 1).
How Does Oregon Stack Up?
Compared to the National average, Oregon's cities and urban areas are beating the national average. Just five days ago, on June 2nd, the BLS reported that United Sates civilian unemployment hit a cycle low of 4.3%. The Great Recession cycle high of the national average clocked in at 10% in October of 2009. This 5.7% decline is less dramatic than Portland's 8.3% gains.
The national average still has not hit a generational low- that came in April of 2000 at 3.8%. Going back even further, the index saw a low of 2.5% in May of 1953. The national average has a hard time breaking towards lows Oregon is currently seeing for many reasons, one of them being that there will almost always a region that's highly concentrated in a poor performing economic sector- New Mexico is currently seeing 6.7% unemployment, for instance 2
The Unemployment Rate, Defined
Stated simply, the unemployment rate is the share of the workforce that is currently experiencing unemployment in a given period. The Bureau of Labor Statistics collates this data and reports unemployment (aka "U-3") data monthly. The BLS U-3 unemployment is not the only metric of unemployment, but it is the most commonly cited. Finance and economic reports will often use this report interchangeably with the term "unemployment."
This data is of great interest to investors and analysts because it's a long-running benchmark of economic participation and business conditions. It's usefulness has been questioned in recent years, with some commentators focusing on Labor Force Participation or other unemployment related reports. The Federal Reserve itself, which is mandated with achieving full employment, moved away from its use of unemployment rate as a metric of financial health recently. It now tracks a multi-factor index of labor market health called the Labor Market Conditions Index (LMCI).
- Portland Unemployment
Despite valid criticisms of the BLS unemployment report, we still watch it as long term investors. Indeed, as Variable Annuity focused asset managers, business and economic bellwethers with long, robust reporting histories are of unique value to us. For instance, this new generational low (previous generational low of 3.8% in Portland) across Oregon cities demonstrates that major concerns about the fundamental health of Oregon's economy have markedly improved in recent years. The rate of recovery in this benchmark has been impressive, no matter how heavily one weights the value of the report itself.
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Meet the Author & Portfolio Manager
Victor Schramm is a Certified Fund Specialist (CFS®), with expertise in Mutual Funds & Variable Annuity Separate Accounts. He focuses on long term investing geared toward our annuity clients as a Fee Only Investment Advisor. He lives in Portland, OR.