Forecast: U.S. trends could drag down Oregon's economic boom
SALEM Oregons economy remains healthy across the board, outperforming other states in job growth and other indicators, state economists told lawmakers in Salem Wednesday.
But the economists also warned that a slowdown in the U.S. economy would likely drag down the states economic boom.
Given that Oregon has traditionally very much synchronized with the U.S. business cycle and our revenues are very much tied to personal income, this is something we are watching very closely, said state economist Mark McMullen.
Lawmakers heard the state's quarterly economic forecast Wednesday at a joint meeting of the Senate Committee on Finance and Revenue and the House Revenue Committee.
The report showed employers in the state continue to add nearly 5,000 jobs per month, double the rate of U.S. jobs growth, McMullen said.
It is really unsustainable right now how fast were growing, McMullen said. Were adding about twice as many jobs as we are workers so at some point this has to balance out.
The brisk job growth has created a tight labor market, which is driving up wages, said state economist Josh Lehner. Retiring baby boomers are expected to make that labor market even tighter, Lehner said.
But the national economic picture is not as bright, McMullen said.
U.S. personal income growth is slowing from 6 percent at the beginning of 2015 to half of that now, he said.
Weakness in manufacturing has spread beyond energy production to more industries, and investment spending continues to stay flat. Other states are starting to see their sales and income tax revenues stagger at amounts below economists projections, McMullen said.
State revenue on track
General fund revenue is on track to reach $18.334 billion, down $2.2 million from the June forecast of $18.336.5 billion, according to the state revenue forecast.
The economic and revenue forecasts didnt address what the states revenue would look like if Measure 97 passes in November. The corporate sales tax measure would add an estimated $3 billion more per year to state coffers. If the tax measure passes, the Office of Economic Analysis will adjust state revenue numbers for the December forecast.
Todays economic and revenue forecast shows that our efforts and economic policies are moving Oregons economy forward, said Senate Majority Leader Ginny Burdick, D-Portland. Burdick said Senate Democrats would continue to push for policies to boost the states economy and quality of life.
Meanwhile, Republicans asked lawmakers to proceed with caution in passing new policy.
Right now, Oregons economy is holding steady, said House Minority Leader Mike McLane, R-Powell Butte. However, there are some indications that things are beginning to slow down in other states around the country. Because our state is so interconnected with national and international markets, our government should proceed with caution. Now is not the time for significant policy changes that would not only produce uncertainty but could have a chilling impact on our private sector.
By Paris Achen
Portland Tribune Capital Bureau Reporter
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