Jobless rate: not as scary as it looks?
Economists, analysts squint to see bright side in 0.3 percent jobless rise
If there is a glimmer of hope in the state's gloomy 8.5 percent unemployment rate Ñ which reached a 17-year high last month Ñ it is this: The jump resulted from an increase in the number of new residents and others looking for work and not from a loss of jobs, according to one Portland economist.
John Mitchell, the Western region economist for U.S. Bancorp, saw it as the one positive note in the state Employment Department's latest jobless report. He noted, however, that he didn't mean to imply that the report 'is good news,' just that 'at least it's not deterioration.'
Mitchell was referring to the fact that the number of nonfarm jobs in Oregon increased in May and June by more than 12,000 Ñ even though the unemployment rate shot up from 8.2 percent in May to 8.5 percent in June, according to the department's report, released Friday.
The high unemployment rate was caused by a substantial increase in the number of people looking for work last month, said Employment Department economist Art Ayre.
They included people who moved to Oregon despite the high unemployment rate, high school and college students getting out of school and looking for work, and people who have been out of the work force but have decided to start looking again.
'The economy has not yet stabilized, even though we have had a couple of months that are not in a down trend,' Ayre said.
That last part is what gives Mitchell some hope: 'The (two-month) numbers suggest that employment is rising.'
But Mitchell and other local economists say the sluggish national economy has to grow at a faster rate before Oregon sees any significant upturn in employment.
'There is no way of knowing when that will happen,' said William Conerly, principal of Conerly Consulting LLC in Portland. The employment department's report shows Oregon's economy as 'somewhere between flat and lousy,' he said.
'I'm hearing more and more anecdotes of people who are optimistic Ñ of businesses starting to plan to spend,' he said. 'But what I hear isn't actual spending.
'I expected it (to happen) six months ago,' Conerly said of an upturn. 'One of these days, the economy will surprise us on the upside.'
Economist Joe Cortright, owner of the Portland consulting firm Impresa Inc., fears that the nation's current fiscal policy will not 'get us back on track.'
The drastic budget cuts that most state and local governments Ñ including Oregon's Ñ are making will add to the stagnation, he said.
Here is more information from the employment report:
• The 0.3 percent rise in Oregon's unemployment rate was the same as the increase in the national rate, which went from 6.1 percent in May to 6.4 percent in June.
• At 8.5 percent, Oregon's unemployment rate is the state's highest since May 1986, when it was 8.8 percent.
• Oregon's unemployment rate is expected to remain the nation's highest, according to Ayre.
• The Portland area has been hardest hit by the current recession, recording the state's largest number of job losses, Ayre said.
• Four industries added nearly 3,000 jobs each last month: construction, manufacturing, professional and business services, and leisure and hospitality. Health services also posted gains.
• Among the losing sectors: some manufacturing, including computer and electronic products, and government services.